Business Law: Understanding Legal Systems and Their Impact on Businesses

This assignment delves into the intricacies of the UK legal system, exploring its sources, the role of government in law-making, and the impact of key legislations on businesses. It examines the effectiveness of the legal system through recent reforms and developments, providing specific examples of how company, employment, and contract law influence business operations. The assignment further analyzes the potential impacts of regulations, legislation, and standards, offering a critical evaluation of the legal system's strengths and weaknesses. It then explores legal solutions for business problems such as contract termination, insolvency, and liquidation, providing justifications and assessing the positive and negative impacts of these solutions. Finally, the assignment recommends alternative legal solutions based on different legal frameworks, comparing and contrasting their effectiveness with traditional legal advice.

Business Law
1 | P a g e

Table of Contents
Introduction........................................................................................................................3
Section 1– Nature of legal systems and legislations impacting businesses.....................4
Task 1................................................................................................................................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
Task 2..............................................................................................................................10
P3 Using specific examples illustrate how company, employment and contract law
has a potential impact upon 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 judgements.
..................................................................................................................................13
Section 2 – Legal solutions to business problems..........................................................14
P4 Suggest appropriate legal solutions for a range of business problems e.g.
termination of contract, rescue from insolvency and liquidation...............................14
P5 Provide justifications for the use of appropriate legal solutions..........................16
M3 Assess the positive and negative impacts of legal solutions to business
problems...................................................................................................................17
P6 Recommend legal solutions based upon a different country’s legal system
and/or a different legal framework............................................................................18
M4 Compare and contrast the effectiveness of these recommendations................19
D2 Critically review and evaluate the use of appropriate legal solutions in
comparison with alternative legal advice..................................................................20
Conclusion.......................................................................................................................21
Reference:.......................................................................................................................22
2 | P a g e

3 | P a g e

Introduction
Law is considered as a guide for the community or the society of the nation in regards to
the illicit activities which may affect the development of such society under the legal
framework of the respective nation. It is applicable to each and every citizen or the
organisations which operate its business under its control. Business law is the laws
which are related and applicable to such organisations and it is essential that all these
laws are followed by the organisation as non-compliance attracts legal penalties. This
assignment is based on the legal system of the U.K. and the laws under it. It also
includes the sources by which the laws in the legal framework of the U.K. have
emerged. Different sources of law are considered while formulating the law with the
view that this helps in formulating an effective law. There is a number of sources in
lawmaking, the main of which is the common law on which the U.K.’s legal system is
based. However, the decision in this legal system is made with the combination of
common law and statutes. It also includes the significance of the various applicable
laws in the business which includes the health and safety at the place of employment,
safeguarding the data, law related to equal opportunity. This assignment also includes
two scenarios, the solution, and recommendation to which will be provided as per
applicable laws on the business.
4 | P a g e

Section 1– Nature of legal systems and legislations impacting businesses
Task 1
P1 Explain different sources of law and laws that organizations must comply with
In accordance with the given statement, it is speech which is delivered by the Queen of
the U.K. and such speech is known as “Queen’s Speech”. It is an event which takes
place at the time of commencement of the session which is considered as “State
opening of the Parliament”. Such event takes place before both the Houses of
Parliament i.e. House of Lords and House of Commons in November of every year. In
this speech, the Queen highlights the plans and the strategies for the objectives which
are to be performed by the Government and Parliament for the coming year. It is a huge
event which is also witnessed by the public at large and media covering such event and
the speech of the Queen is delivered from the House of Lord’s throne.
Sources of Law
It is to be made sure that all the aspects which may affect the legal system of the U.K.
are covered in the law which is being formulated. In this regards, different sources are
taken into consideration so that every aspect is covered. Such laws then are used by
the courts and the judges of the while serving justice. These sources are as follows:
Precedents/ Case Study: These are the cases and the decisions which are made by
the court in the earlier period times and these are referred to while law-making. These
are the practices which are followed in the legal system for a long period of time. It is
the laws which are used to resolve the issues of the general nature. Cases which are
dealt by the court are published in the form of legal reports which are also considered
as law report (MacCormick, et. al., 2016). In these report, cases of high importance are
published which will be referred to in the future times by the judges for dealing with the
issues at that time. In a year, more than 250 cases are published in these reports and
these cases are used as sources for making the law. As the legal system of the U.K. is
based on Principle of Stare Decisis, the orders and the judgment passed by the
5 | P a g e

superior court are required to be followed by the subordinate courts and most of the
cases in these reports are cases of superior courts.
Legislation: These are the laws which are formulated and the developed by the
Parliament of the United Kingdom. There are two houses in the Parliament i.e. the
House of Lords and Commons which are the main bodies in formulating the law
(Besson and d'Aspremont, 2017). These are the laws which are applicable on the whole
nation and each and every citizen unless otherwise specified. Laws made by the
Parliament cannot be argued with.
European Law: These are the laws which are made by the European Union and it is
essential that the law made under the legal framework of the U.K. There are certain
treaties or arrangement according to which the English Legal System is required to be
consistent with the European Law. If any law is inconsistent with the European Law then
it will not be considered valid.
Apart from this, there are some other sources which are also considered while making
the law and which are as follows:
Legal Textbooks: These are the books which are based on a particular law containing
the deep analysis of such law. However, there are various books which include different
law and the analysis of the different laws is made in same.
Legal Journal/ Articles: These are the comments which are made by the person
having expert knowledge of the law (Besson and d'Aspremont, 2017). It is the analysis
of the laws which are made on the laws of the Parliament.
Applicable laws on the organisation
There are various sources which are applicable to the organisation and such
organisations are liable to follow these applicable laws. These laws are as follows:
Employment Rights Act, 1996: This act provides the provisions which are to be
complied by the principals and the workers. It includes the provisions for the minimum
wages of the workers, contract of services which is to be made between the principal
6 | P a g e

and the workers (Freedland, et. al., 2016). This act even provides the grounds on which
a worker can be removed from the employment.
Corporation Law: From the time incorporating a company and till the time, it is
dissolved, the provisions of this law are to be followed by the management of the
company. This law also provides the norms for the appointment, removal of the
directors, secretaries, managers, etc. Each and every organisation operating its
business in the legal framework of the U.K. is required to comply with this law in order to
operate its business in true and fair manner and to avoid the legal consequence which
may include huge fine on the company and creates a burden on it.
7 | P a g e

P2 Explain the role of government in law-making and how statutory and common
law is applied in the justice courts
There are different authorities which hold a crucial place in the process of the making
and developing law in the United Kingdom. In the legal system of the United Kingdom,
the area in which control of the law is required is identified by the Government and in
this regards, a draft is prepared by the persons or the experts appointed by the
Government or it can be prepared by the Government itself. Once the draft is prepared,
it is submitted to the Parliament which is reviewed by both its houses i.e. House of
Lords and House of Commons (Zander, 2015). There are certain stages which are
included in the process of lawmaking which are as follows:
First Stage: In this stage, the first reading of the draft is done i.e. it is the general
reading.
Second Stage: In this stage, the draft is reviewed by the House of Commons in which
the members of the house make discussion on the draft i.e. it is known as second
reading. Opinions of the member are presented before other members of the house.
Committee Stage: If there is a need to make certain changes it will be highlighted in
this stage by the committee constituted for the same purpose. Different
committees are made for reviewing different drafts.
Report Stage: It is a stage in which the changes to be made are reported by the
committee to the Houses of Parliament and further discussions are made between the
Houses.
Third Reading: This is the final reading after which the draft is transferred to the House
of Lords.
House of Lords: In this stage, the draft is reviewed by the member of this house and if
any alteration is required to be made will be made in this stage and it will be reverted to
the House of Commons again.
8 | P a g e

Royal Assent: In accordance with the Royal Assent Act, 1967, a draft of any law is to
be approved by the Monarch and notification of the same is to be published in the
Official Gazette (Open Learn, 2018).
Applicability of Common and Statutory Law
There are different types of law which are present in the legal system of the United
Kingdom i.e. Common and Statutory Law. If there is any clash between the two, the
common law will supersede over statutory law (Koprowski, 2017). There are various
laws which are enacted by the Parliament and applicable on the organisations such as
Employment Rights Act, Health, and Safety Act, etc. Whereas Common laws are the
laws which are enacted with the help of superior courts and the decisions made by such
courts are to be obliged by subordinate court.
9 | P a g e

M1 Evaluate the effectiveness of the legal system in terms of recent reforms and
developments
For maintaining the effectiveness of law and the legal system, it is necessary that the
changes or reforms are made in the legal framework. These reforms took place in the
last fifteen years, there were certain changes in the institutions and other bodies are
made. Certain institutions like Ministry of Justice was established which replaced the
Department of the Current Affairs, the establishment of the Supreme Court which
overtook the functions of House of Lords. Due to technological upgradation,
digitalisation has also been implemented in the legal system of the U.K. as virtual courts
are set up and the proceedings in such courts are done with the help of internet. Legal
practitioners also have the option to update the system with the documents related to
the respective case.
10 | P a g e

Task 2
P3 Using specific examples illustrate how company, employment and contract
law has a potential impact upon business.
Health and Safety Regulations
There are various duties and the responsibilities of the principal of the company towards
the employees of the company which includes providing safe, secure and healthy
working environment to the workers. For overseeing the activities that whether the
safety and health of the workers are taken care of, is done by the Health and the
Safety at Work Act, 1974 which provides the norms for ensuring the safety of the
workers. It is stated that the principal must take precautions for the safety of the workers
(Holt and Allen, 2015). It is also mentioned that if any of the workers of the principal is
injured due to the negligence in this regards, the principal will be held liable for injuries
sustained by the employees. This may also attract legal penalties.
Equal Opportunities
In accordance with the Equality Act, 2010, every individual must be provided equal
opportunity for working in an organisation. This includes that equal chances must be
given to the workers or the employees employed in an organisation to grow in their
professional career. It is also stated that no discrimination must be made in an
organisation on the basis of gender, caste, religion, age, beliefs, disability (England,
N.H.S., 2016). Moreover, if the workers of the principal are suffering from a certain
disability, then the principal must make a certain arrangement so that such worker may
not face any difficulties at the place of work. If any discrimination is done in an
organisation then the principal will be held liable and may face penalties under the law.
General Data Protection Regulation (GDPR)
It is essential that data and information of the company must be properly protected as if
the data of the company is compromised than the company will face loss in huge
11 | P a g e

quantity including the financial loss as well. Therefore, in order to regulate the flow of
information and data, companies comply with the provisions of the EU GDPR (General
Data Protection Regulation). All the information and the data which is related to the
operations are to be collected, stored, processed and utilised in accordance with the
above-mentioned law. It provides protection against using the personal data of the
workers without any reasonable cause (Kumar and Reinartz, 2018). Moreover, this
improves the governance of the information and the data and improves the recognition
of the company in the market as consumers will have more trust in the company due to
the security of data.
If JPM Publishing is to be converted into Public Limited Company, it is to be made sure
that above-mentioned laws are properly followed along with other applicable laws on the
company. The management of JPM Publishing must make sure that proper safeguard
is provided to the workers ensuring about their health and safety. Moreover, no
discrimination must be made between the workers on any basis. At the same time, the
personal data and information of the workers must not be accessed by the company
without any reasonable cause.
12 | P a g e

M2 Differentiate and analyze the potential impacts of regulations, legislation and
standards.
There are different norms which are categorised in the different names such as
regulations, legislations and the standards. Laws are norms which are formulated and
developed by the Parliament of the nation. All the laws are made by the Parliament and
are discussed in both the houses of the Parliament. Regulations are considered as the
guide which includes that how all the norms of the laws will work and will be enforced
(Edmond, 2017). Standards are the supporting rules which provide helps in
implementation of the laws made. It provides details and proper clarity that what are the
benchmarks which are required to be achieved in order to meet with the requirement of
the law.
13 | P a g e

D1 Provide a coherent and critical evaluation of the legal system and law, with
evidence drawn from a range of different relevant examples to support
judgements.
The effect of the legal system of the United Kingdom is well established. The
expectation of the citizen of the United Kingdom is high with the legal system i.e. it must
provide the fair and just decisions. It is well known that there are various rights which
are available with the citizens of the above-mentioned nation and the legal system such
nation provides safeguard to against the infringement of the rights provided under the
laws (Arden, 2016). The impact of the legal system also controls and regulates the illicit
activities but its effects are dissolved due to the involvement of the police and the
correctional system. The dilution of the authority of the legal system is the only
drawback of this legal system otherwise it provides protection to the citizens,
communities, organisations, etc.
14 | P a g e

Section 2 – Legal solutions to business problems
P4 Suggest appropriate legal solutions for a range of business problems e.g.
termination of contract, rescue from insolvency and liquidation
Case 1
Facts of the case:
A company, Champion Ltd. based in London was offered cash by premier league club
to move from the construction site in the north for a new stadium. Due to such
movement of the company, it lost various customers and faced financial difficulties. The
company didn’t make payment to the banks and the creditors of the loan taken for
moving. Now creditors want to sue the company for winding up.
Issue:
It is asked by the company to inform whether the creditors have the power to sue the
company in the court for winding up.
Applicable Law:
For regulating the process of the winding up of the company, provisions of Companies
Act, 2006 and the Insolvency Act, 1986. It is stated in the act that if the debts are of
more than the amount of £750, then for the demanding the payment, creditor of the
company has to serve a notice of 21 days stating that payment is to be made by the
company within the specified period of time (Kraakman and Armour, 2017). If the debts
of the creditor are not made in full within such specified period of time, then these acts
provide right to sue the company in the court for winding up. The company have the
option to settle the debts in full or enter into an agreement of winding up with the
creditors i.e. Creditors Voluntary Liquidation Agreement.
15 | P a g e

Case 2
Facts of the case
CFO of Amber Ltd, Mr. Anderson was offered a position of the CEO in Beta Ltd.
However, the employment contract of Amber Ltd with Mr. Anderson stated that for
removing or resigning from the position a notice of 12 months has to be given. But same
has not followed Mr. Anderson and he agreed to join Beta Ltd.
Issues:
In regards to the breach of contract, Amber Ltd. wants to file a suit against Mr.
Anderson and wants to identify that what are the chances of the company to injunction
order against him.
Applicable Law:
In the given scenario, provisions of the Employment Rights Act, 1990 and Contracts
(Applicable Law) Act, 1990 is to be followed by the company. It is stated in the acts
that both the parties have the obligation to serve the notice of termination of contract
(Painter and Holmes, 2015). The different time period for serving the notice is also
provided in the act such as if the person is employed with the company for a period over
12 years then notice of minimum 12 weeks is to be served (Ashworth and Perera,
2018). However, as per the contract law, it is specified that the terms and conditions of
the contract are to be followed by both the parties to the employment.
Recommendations
It is recommended that in the first case of Champion Ltd. the payment to the creditors
must be made in full within the specified period of time i.e. 21 days otherwise it must
enter into a contract with the creditors. In the second case, Amber Ltd can sue Mr.
Anderson for breaching the terms of the contract and a demanding injunction against
him in the court. However, both the cases can be solved by the alternative dispute
resolution.
16 | P a g e

P5 Provide justifications for the use of appropriate legal solutions
Case 1
As per the given scenario of the Champion Ltd, it is recommended that the creditors
must be paid in full, the payment of which is due from the part of the company within the
specified period of the time is provided in the statutory notice which is given by the
creditors. However, the company also have the option to get into voluntary winding up
by getting into agreement with creditors (Johns, 2017). It can be done by the
management of the company and its members if they believe that the company won’t be
able to come back on track, and then the option of voluntary winding up can be opted by
the company. Once the process of liquidation starts whole control will be in the hands of
the liquidators until the process of winding up is completed.
Case 2
In the case of the Amber Ltd and Mr. Anderson, there is a breach of a term of the
employment contract i.e. for leaving the position of the CFO or removing CFO from its
position, each party has to serve notice of twelve months. However, the same was not
followed by Mr. Anderson and when Beta Ltd offered him the position of the CEO, he
didn’t serve the notice as per the terms of the contract employment (Cartwright, 2016).
In accordance with the applicable laws, Amber Ltd can sue CFO for not following the
terms specified in the employment contract and in this regards, the court can issue an
injunction against Mr. Anderson.
17 | P a g e

M3 Assess the positive and negative impacts of legal solutions to business
problems.
It is understood that the legal solution provided as per the applicable laws have both
positive and negative impact which are as follows:
Positive Impact
 It provides the insight of to the parties about the importance of the law and the
legal system under which they are legally bounded to each other (Morrison, and
Anderson, 2015).
 This will allow the individuals or the organisations to work as per the applicable
laws and proper justice will be served.
Negative Impact
 As the penalties are monetary and high, this creates a burden on the financial
pressure on the company.
 Complying with the different laws is difficult for the organisation it requires a high
level of involvement of the management (Reuters, 2018).
 There are various loopholes which are used by the organisation for taking
advantage.
18 | P a g e

P6 Recommend legal solutions based upon a different country’s legal system
and/or a different legal framework.
The issues which are the mentioned in the given cases can be solved by methods other
than the litigation system i.e. the alternative dispute resolution. There are different
methods in which the arbitration, mediation, negotiation, and conciliation. Arbitration and
mediation are known as the most popular methods in the United Kingdom. It is the
method which provides quick redressal of the disputes. It can be defined as Alternative
Dispute Resolution is a mechanism in which issues are solved by established bodies
rather than reaching out to the litigation system of the United Kingdom.
Different types of ADRs are as follows:
Arbitration: It is a method in which the disputes between the parties are resolved by
the third parties which are appointed by the parties to the disputes itself (Blake, et. al.,
2016). The third party acts as the arbitrator and provides the decision i.e. the award
which the parties are liable to follow. The case of Champion Ltd can be resolved by
this method.
Negotiation: It is a method in which the terms of the arrangement between the parties
are modified by making discussion. This is done either by the parties itself or by their
legal representatives. However, this method is best for dispute related to finance.
Conciliation: It is a method in which the third parties, which is appointed by the parties
to disputes, act as a conciliator and listens to the story of both the parties (Cortés,
2016). After that, the solution is provided by bringing both the parties around the table.
Mediation: It is a method in which party appointed works as a mediator between the
parties to the dispute. The main focus of the mediator is on resolving the dispute rather
than following any specific guidelines. Dispute between the Amber Ltd. and Mr.
Anderson can be solved by this method.
19 | P a g e

M4 Compare and contrast the effectiveness of these recommendations
A comparison is made between two of the recommendation mentioned above and
which is related to the provided case.
Arbitration Mediation
Arbitration is the process in which solution
is provided by the third party by following
the certain guidelines (Gill, et.al., 2014).
Mediation is the process in which the
solution is based on the requirement of the
parties as it focuses on bringing parties to
the mutually agreed decision (Singer,
2018).
In this method, the arbitrator is appointed. In this method, the mediator is appointed.
Parties to the dispute are required to follow
the decision of the arbitrator.
There is no such requirement i.e. it is on
the parties to dispute whether to follow the
decision or not.
20 | P a g e

D2 Critically review and evaluate the use of appropriate legal solutions in
comparison with alternative legal advice.
There are various methods of resolving a dispute and in the given cases, Amber Ltd
have the options to file against Mr. Anderson in the court i.e. can file with the litigation
system. However, the disputes can also be solved by methods of ADRs. Proceeding in
the litigation system takes time and requires a lot of investment of the money as well as
patience (Block, 2016). Whereas resolving the method by way of the Alternative Dispute
Resolution provides quick redressal of the issues and the charges of these services as
low as well. Moreover, the focus of these methods is on resolving the issues rather than
following the guidelines and the control in ADRs remains in the hand of the parties
whereas, in litigation system, the court and the judges have whole control.
21 | P a g e

Conclusion
From the analysis of the legal system of the United Kingdom and different laws which
are formulated under this system, it is concluded that law holds a significant place in this
system and controls and regulates the unlawful activities which affect the growth and
development of the society of the nation. Different sources are considered for
formulating the law and laws are made by the chief authority i.e. the Parliament and the
draft of which is prepared by the Government. Various laws are to be complied by the
company i.e. JPM Publishing which includes taking care of health and safety of the
employees, data of the organisation and providing equal opportunities. Both the cases
provided in this assignment attract different laws and the solution to which is provided
as per such applicable law. However, the parties have the option to resolve the issues
by Alternative Dispute Resolution.
22 | P a g e

Reference:
 Arden, L. J., 2016. The Judicial System of England and Wales: A Visitor’s Guide.
Judicial Office.
 Ashworth, A. and Perera, S., 2018. Contractual procedures in the construction
industry. Routledge.
 Besson, S. and d'Aspremont, J., 2017. The Sources of International Law. In The
Oxford handbook on the sources of international law (pp. 1-39). Oxford University
Press.
 Blake, S.H., Browne, J. and Sime, S., 2016. A practical approach to alternative
dispute resolution. Oxford University Press.
 Block, M.J., 2016. The Benefits of Alternate Dispute Resolution for International
Commercial and Intellectual Property Disputes. Rutgers L. Rev., 44, p.1.
 Cartwright, J., 2016. Contract law: An introduction to the English law of contract
for the civil lawyer. Bloomsbury Publishing.
 Cortés, P. ed., 2016. The New Regulatory Framework for Consumer Dispute
Resolution. Oxford University Press.
 England, N.H.S., 2016. NHS ENGLAND. Evidence review: pasireotide for
acromegaly as third-line treatment (adults). Dostęp: https://www. engage.
england. nhs.
uk/consultation/clinical-commissioningwave4/user_uploads/a03x11-pasiretd-
evidnc-rep. pdf (28.12. 2016).
 Freedland, M., Bogg, A., Cabrelli, D., Collins, H., Countouris, N., Davies, A.C.L.,
Deakin, S. and Prassl, J. eds., 2016. The contract of employment. Oxford
University Press. 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.
 Holt, A.S.J. and Allen, J., 2015. Principles of health and safety at work.
Routledge.
23 | P a g e

 Johns, C., 2017. Advantages and Disadvantages of Creditors Voluntary
Liquidation. [Online]. The Insolvency Experts. Available at:
https://www.theinsolvencyexperts.co.uk/advantages-and-disadvantages-of-
creditors-voluntary-liquidation/ [Accessed on 29 June 2018]
 Koprowski, E., 2017. Why Should Business Students Study Law? [Online]. Law
Studies. Available at: https://www.lawstudies.com/article/Why-Should-Business-
Students-Study-Law/ [Accessed on 29 June 2018].
 Kraakman, R. and Armour, J., 2017. The anatomy of corporate law: A
comparative and functional approach. Oxford University Press.
 Kumar, V. and Reinartz, W., 2018. Customer relationship management: Concept,
strategy, and tools. Springer.
 MacCormick, D.N., Summers, R.S. and Goodhart, A.L. eds., 2016. Interpreting
precedents: a comparative study. Routledge.
 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.
 Open Learn, 2018. The law-making process in England and Wales. Available at:
http://www.open.edu/openlearn/society-politics-law/the-law-making-process-
england-and-wales/content-section-1 [Accessed on 29 June 2018]
 Painter, R. and Holmes, A., 2015. Cases and materials on Employment Law.
Oxford University Press, USA.
 Reuters, T., 2018. Contract Law. [Online]. Westlaw.UK. Available at:
https://legalresearch.westlaw.co.uk/practice-areas/contract-law/ [Accessed on 29
June 2018].
 Singer, L., 2018. Settling disputes: Conflict resolution in business, families, and
the legal system. Routledge.
 Zander, M., 2015. The law-making process. Bloomsbury Publishing.
24 | P a g e