Business Law: Understanding the Legal System and its Impact on Businesses

This comprehensive guide explores the fundamental principles of the UK legal system, examining its sources, the role of government in law-making, and the application of statutory and common law in justice courts. It delves into the potential impact of company, employment, and contract law on businesses, providing specific examples to illustrate their practical implications. The guide further explores appropriate legal solutions for business problems such as contract termination, insolvency rescue, and liquidation, offering justifications and assessing their positive and negative impacts. It also recommends legal solutions based on alternative legal frameworks, comparing and contrasting their effectiveness. Finally, the guide critically reviews and evaluates the use of appropriate legal solutions in comparison with alternative legal advice, highlighting the evolving landscape of the legal system and its impact on businesses.

Business Law
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Contents
Introduction................................................................................................................................3
LO1. Explain the basic nature of the legal system.....................................................................4
P1 Explain different sources of law and laws that organisations 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....................................................................................................6
M1 Evaluate the effectiveness of the legal system in terms of recent reforms and
developments..........................................................................................................................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
LO3. Suggest appropriate legal solutions to business problems..............................................12
P4 Suggest appropriate legal solutions for a range of business problems e.g. termination of
contract, rescue from insolvency and liquidation.................................................................12
P5 Provide justifications for the use of appropriate legal solutions.....................................14
M3 Assess the positive and negative impacts of legal solutions to business problems.......15
LO4. Recommend appropriate legal solutions based upon alternative legal advice provided.16
P6 Recommend legal solutions based upon a different country’s legal system and/or a
different legal framework.....................................................................................................16
M4 Compare and contrast the effectiveness of these recommendations..............................18
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D2 Critically review and evaluate the use of appropriate legal solutions in comparison with
alternative legal advice.........................................................................................................19
Conclusion................................................................................................................................20
References................................................................................................................................21
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Introduction
The assignment has been designed in a way to support business runners in developing
business options and selecting the right manner. The various regulation and standards have
been discussed in relation to business to understand the positive and negative impacts drawn
by the same. The case studies relates with the rights of creditors to proceed for winding up
and injunction petition in case of violation of contract liability. In order to give the
appropriate finding legal provisions have been discussed with the set precedents applicable
over these. The present trends in legal system for Alternative dispute resolution have been
understood and the features of these have been compared with the two modes. In the end
effectiveness have been critically analysed about the functioning of justice system established
in nation.
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LO1. Explain the basic nature of the legal system.
P1 Explain different sources of law and laws that organisations must comply with
a) Discus the meaning of this statement and the various sources of UK Laws.
In UK the state opening is the process by which the session of parliament is formally started.
The Queen’s speech starts with opening of government agenda for parliament (Sovereign,
House of Lords and House of commons). The state opening process involves disclosure of
policies and proposed legislation in the upcoming parliament session.
The legislation which government will be making in the session of it are the result of various
social and economic circumstances in the nation and international level. The resultant
circumstances and events have been given the name of source of law and they are classified
in the various types. Thus making of law by parliament is most prevalent method in the
country and conclusion has been drawn of the fact that there is parliamentary supremacy as
no one is above law and everyone is subject to the law making power of parliament.
Parliament in the country has power to even amend the constitution of the country as well and
no one can challenge the law made by it (ILEX, 2018).
Sources of law in United Kingdom:
Acts of Parliament:
The origin of the statute in the country is parliament that is supreme body in the country
which carries the law making function. Example of statue includes Employment Right Act
1996. Law making through statue is carried in the form of bill and discussion by the Member
of Parliament decide whether statute is to be passed or not. There is another mechanism
through which a statue can be formed and it is known by the name of delegated legislation in
which minsters and other authority is given power to make the law. Barristers, judges and
solicitors are the real contributors in shaping common law.
Precedent / Common Law:
The ratio of case sets the binding authority over the below courts. The decision are also
overruled on many occasions and in that case ratio of the later date decided case law will be
the binding precedent over the below courts. In the case of Kleinwort Benson Ltd v. Lincoln
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City Council [1998] 4 All ER 513, it was pronounced that all judge made law is common law
and it is thorough judicial change only relevancy of law is maintained (Law Teacher, 2018).
Law from EU:
United Kingdom is one of the signatories of the European Union committee and therefore it
is bound by all European laws. The situation of contradiction of laws between UK and
European Union, the dominance is there of European Union and all are bound by it only.
International Court:
The judgments that are delivered by international court are followed if the same issue arises
before the municipal courts in the country.
Custom:
The traditional practices those are so habitual and common that the contrary legal practices
cannot be established. These practices are given legal support so that trial impeachment of the
same can be handled in legal manner.
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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.
Parliament body of government makes laws in UK. The government agenda process initiates
the list of issues in order to gain the full support of voters. The winning party in election form
the government of the country. The need of law making can arise due to natural disasters;
terrorism etc. or it can also arise from the commitment of the government towards the
European Union. Once realisation to have law over an issue is emerged idea for the
addressing issues are considered. Ministers are approached for taking forward the idea of law.
The green paper outlines are taken from the group of interested one and matter is consulted
with them after this parliamentary counsel outlines the principles in bill.
Since limited session of the parliament are there, the bill for discussion is decided according
to their urgency and seriousness of subject matter of bill and after making this crucial
decision of forwarding for debate in parliament stages have to be cleared for final passing or
bill. Bill can be initiated in any chamber i.e. Lords of Common and after introduction of bill
process for discussion is same. First bill is read simply and then MP discusses the main
principles of the bill. Then the committee of MP and peer one scrutinises the principles and
then amendments decision are taken. After discussion and voting bill sovereign also gives
consent to it and then finally bill becomes law.
Application:
Statues are applied by judges in court for solving case before them and interpretation tools
like harmonising rule, literal rule and grammatical rules are used. Both common law of court
and statute of parliament lays mandate for application over the relevant subject matters. The
statute guides the way in which preventive action can be taken in various manner and
common law guides as to nature of liability to which breaker of law will be bound.
Legislature cannot compete with new kinds of problem and courts in country constantly woks
for making the legal system complete by filling gapes in statutory provisions. The jurisdiction
of court makes it ratio of case biding over the other below courts (Parliament UK, 2018).
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M1 Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.
Development is required in law as any other sector and change in legal rules and principle
carries the effective working of courts. These reforms also assist in maintaining trust and
faith of people. The reforms in constitution have been done recently and the basic changes
carried in it are supportive to legal system. Legal aid commission is system that is also
helpful tool for the judiciary of country to render the justice help to actual needy person at the
cost of government. This system has completely supportive in meeting the object that justice
is equal for all and everyone has right to seek justice. Thus new developments in laws are
more effective and improving the total legal situation.
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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’s directors will have to meet all the legal requirements given under the
below acts so that it can raise funds from public easily. The employer of JPM Publishing
will bear the below explained kinds of liabilities under various legal laws. The director of
company will meet the all duties with care and full dedication which also includes duties
towards employees and applicable law.
1. Health and Safety regulations:
The general duties of directors are given under the Health and Safety Act 1974. They not
only have safety duty towards employees only the list is very which includes public, lawful
visitor at work etc. Only employer does not bear the safety duty employees themselves also
have the duty towards each other and towards work premises as well. The act does not ask
employer to prevent the accidents that are impossible to be prevented or the risk in prevention
of which expenses are disproportionate to risk etc. The only lays general duty which
according to prudent sense is seen apparent and preventive measures can be taken in that
regard.
The Management of Health and Safety at Work Regulations 1999, is there wherein risk has
to be assessed by the employer and the finding of the same has to be noted by employer and
at least five employees of him. The common duties of employer under the act are managing
risk level in organisation and taking the preventive and risk mitigation, hiring the competent
employees who can assist him in settling and arranging the preventive practices. Setting the
effective mechanism to deal in the emergency situation. Having strong and desired training
arrangement in organisation etc. (Work Smart, 2018).
2. Equal Opportunities regulations:
Discriminatory treatment with employees is unlawful. Equality Act 2010v is consolidated act
wherein all types of discriminatory practices have been addressed. The act has replaced
previous all acts like Sex Discrimination Act 1975, Race Relation Act 1976 and Disability
Discrimination Act 1995. There are separated processes which have been developed for
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discriminatory practices. The procedure of discriminatory practices at work after 2010 will be
applicable over the JPM Publishing. The Acts provides that everyone at work ensure basic
equality framework for direct and indirect discrimination, allowing the positive action in case
of discriminatory cases. Employer has to follow a complete check system over positive
attitude of employees towards each other. Making equal platform for work and to get
promoted for the various available position in the organisation. Allowing every applicant to
give interview and get selected on meeting the prescribed qualification (Gov. UK, 2018).
3. General Data Protection Regulation (GDPR).
GDPR 2018 has been developed as one of strong legislation for handling the data. It provides
the strong ways in which the personalised information of the individuals can be kept in the
business. The act has also provides the strong remedies and ways in which the individual can
handle his private information and various ways to secure the information can also be used
under it. The act for the first time allowed the individual to access the information that is
stored by the company and therefore a complete transparency has been developed in the act.
All business corporations and companies are bound by the rules of the act and they have to
revise their practices and data storing system to save the technical threats (Burgess, 2018).
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M2 Differentiate and analyse the potential impacts of regulations, legislation and
standards.
The JPM will get the positive impression result if it will follow the legal requirements given
under these regulations and standards. Every business run short of financial resources and as
a public company if it will be raising fund from the public it will have to raise the fund and
investment will only be made by stakeholders when the good image of the company have
been established. Therefore follow up to legal requirements will be helpful in running the
public company by successfully raising the required fund (Parliament UK, 2018).
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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 judgements.
The statutory law is static and common law power of court is totally different wherein the
judges are vigilant and makes the judgment that fits to the current prevailing social
conditions. The Rule of Change as per the concept of Hart requires the amendment and
changes in law to save them to be redundant and ineffective. The shortcoming of legislature
is removed by the judges in court and also through amendment by parliamentary process as
well which makes the legal system working even in new kinds of social challenges. The legal
aid system developed in country to serve the justice to poor shows positive attitude and
endeavours by government to achieve the object of legal system as effective. Continuous
development tool adopted by government will be supporting in justice system of country
(ILEX, 2018).
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LO3. Suggest appropriate legal solutions to business problems.
P4 Suggest appropriate legal solutions for a range of business problems e.g. termination
of contract, rescue from insolvency and liquidation
Case1.
The decision of Champion Ltd. to move North London resulted in creation of the financial
problem in the business. The customers of the company also got declined. The result of these
crises was directly in clearing the payment of creditors. Therefore company started to receive
threat from the creditors for winding up petition.
Creditors are one of the stakeholders of the company and they contribute financial resources
and thereby plays role in assisting business activities to be carried out in the planned manner.
Section 186 of Insolvency Act 1986 allows the creditor to file winding up petition. Under
section 124 of the Insolvency Act 1986 compulsory winding up application is made. Under
section 122 (1) (f) of the act there is one of the ground that company y can be wound up if it
unable to pay the debts to creditors. Thus creditors in the case of Champion Ltd have valid
ground to make the winding up petition.
Process of Winding Up:
Chapter 3 part 7 of the Insolvency Act 1986 deals in winding up of the company. Petition has
to serve the notice of winding up of company along with the London Gazette. Official
receiver and liquidator are appointed. The valuation of the assets of the company and
accounts of the company is assessed by liquidator and then the same is sold through auction
and the remaining finance is sold among the stakeholders who are legally entitled to it (Real
Business Rescue, 2018).
Case2.
Anderson was approached by Beta Ltd. to join it with good package offer. He was already
working with the Amber Ltd. in which he was handling the confidential information. The
contract of employment with it contained the 12 moth notice period necessary before leaving
the job and in case of termination by the company. Anderson accepted the offer of Beta Ltd.
on ending of transitional term on 31 May 2016. However his proposal was not accepted and
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Amber Ltd. on relying notice period requirement sough injunction from court to stop him to
join with Beta Ltd.
Section 86 of the employment right act contains the slab of notice that has to be given in the
employment contract for leaving the job and termination of the employee by the employer.
One week notice is minimum in case service is below one year and if employment is more
than 2 but less than 12 years, minimum notice time is one week and 12 weeks in case of
continuous employment. However in case of any employment noticed period cannot go
beyond 12 weeks. Amber Ltd. has not followed the given limit of notice period and therefore
it will not succeed in getting the injunction against Anderson and therefore it cannot prevent
him to join with Beta Ltd (Business Advice Services (2018).
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P5 Provide justifications for the use of appropriate legal solutions
Case1.
In case of Champion Ltd. the Insolvency Act 1986 under section 122 (1) (f) gives the
creditors right to file for compulsory winding up application before court when company
does not make payment on time. On the multiple failures made by the Champion Ltd
creditors have the lawful basis to file the wind up application.
Case2.
In case of Amber Ltd. the notice period had to be reasonable. The Employment Right Act
1996 explicitly lays down the notice period requirements and that has to be followed since
the act is in force till date. Prior to ERA 1996 there was not definition of “reasonable period”
for rendering notice and in Creen v Wright it was held that reasonability is a determining
factor in accordance with facts and individual case circumstances. Neither as per applicable
law and common law decision 12 moth notice period set in employment contract with
Anderson can be said to be reasonable at present business trends and no injunction therefore
can be granted to Amber Ltd (Net Law Man, 2018).
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M3 Assess the positive and negative impacts of legal solutions to business problems.
In case of Champion Ltd. the creditors on successful wingding up will get the share for
which they were waiting. However they will have to make further investments and will have
to take the risk of further investing. However it is also possible in winding up of the company
that no proceed is left and dues of the company are high, in that case creditors will be in total
loss. Therefore they could have given extra time to company to recover its financial position
and then pay return to them.
The subsequent case of Anderson, Amber Ltd. went for relief to court and asked injunction.
This could result in adverse result to it like in the written statement to plaint filed by it
Anderson got the chance to claim the remedy from the court and it will be difficult for the
company to prove the reasonability and adverse consequences will be disproportionate.
However Anderson will get the clearance for joining the employment with Beta Ltd.
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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.
The alternative disputes system is trending under the UNICITRAL MODEL Law. The
member countries are founding and adopting the various kinds of ADR. Like in India the four
modes of ADR are prevalent i.e. Conciliation, mediation, negotiation and arbitration. Apart
from these Ombudsman is also developing scheme over there. Same is the case in United
Kingdom in which apart from these above methods adjudication is also there for providing
the alternate option to the parties to the dispute.
Arbitration
Arbitrator is one in whom both sides have confidence. Date of arbitration can be decided
much frequently than court. Arbitration is little costly than courts. Arbitration is completely
private process. Limited options are left for appeal in case of arbitration.
Mediation
Mediator arranges the structured dialogue between the two sides wherein the multiple stages
are designed for settlement. The articulation of the mutual interest is designed under this.
The object of it two side and mediator himself is settlement only (Marighetto, 2018).
Conciliation
Best fits to consumer and labour disputes. The common agreement is directed to parties. The
main focus is there on the problem identification and then possible solution to it is suggested
under this.
Negotiation
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Its best use is agreement formation between two sides of contract by allowing assertion of
two sides commonly. It helps in allowing parties to decide the terms and conditions on
which their contract will be based.
Adjudication
Notice is given in writing in which nature of dispute is given and other details are
mentioned.
Abdicating nominee body is helps in appointment of adjudicator. The total time period that
can be taken in adjudication is 28 days however it can be extended only by 14 days with
consent of party that referred the dispute (Out Law, 2017).
Ombudsman
Ombudsman performs the function of independent investigatory if same is found to be
justified by him. Sufferer of any service can send the matter to ombudsman also after which
he will find out the solution of the matter.
In case of Anderson and Amber Ltd. they had to rush for adjudication in which both the sides
could have found their solutions. Adjudicator would have helped them to decide the
reasonability of notice period as per the section 86 of ERA 1996. Without seeking injunction
they both will be able to solve their matter in informal manner (Citizens Advice, 2018).
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M4 Compare and contrast the effectiveness of these recommendations.
The various choices are made for solution and therefore mediation and arbitration are
common forms that have been sharpen for finding the better solution. Arbitration will allow
business for solving all kinds of commercial conflicts in quasi formal manner. Mediation will
on the other hand is totally informal and there is no kind of binding authority over two sides
in this mode. Arbitrator will maintain the fine balance of legal formalities and interest and
focus of two sides to find solution. Mediator will only be focused to find solution (All About,
2018).
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D2 Critically review and evaluate the use of appropriate legal solutions in comparison
with alternative legal advice.
Alternative solution system is acting as complementary way to remove the defects of legal
system in the country. Innumerable defects in courts is affects the justice system in nation and
people residing in the country are directly facing various issues and challenges in securing the
justice to which they are eligible. With the introduction of ADR little changes have been seen
and scope of seeking justice is enlarged. With the further shaping of these methods better
development and reforms supportive to justice will assist the justice seeker in getting
complete justice (SCE, 2018).
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Conclusion
Business laws are necessary to be followed actively by the directors and company secretory
along with developing a better understanding of the legal system that is prevalent in the
country in which business is setup or it is to be setup in the near future. The safety and
preventives laws have been realised to be preventive and guides the business role players to
management their workplace effective. The best practices that can be adopted in every
business is that legal expert be hired who can guide in better way the legal compliance
requirements in the business. Adequate standards applicable over business have been
understood and the effective manner of compliance has been developed.
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References
 All About 2018, Alternative Dispute Resolution. Available at:
https://www.allaboutlaw.co.uk/stage/areas-of-law/alternative-dispute-resolution.
[Accessed on 28 June 2018]
 Burgess, M., 2018. What is GDPR? The summary guide to GDPR compliance in the
UK. Available at: http://www.wired.co.uk/article/what-is-gdpr-uk-eu-legislation-
compliance-summary-fines-2018. [Accessed on 28 June 2018]
 Business Advice Services 2018, struggling to resolve issues with HMRC? Available
at: http://businessadviceservices.co.uk/?
gclid=Cj0KCQjwjtLZBRDLARIsAKT6fXyg_C-
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[Accessed on 28 June 2018]
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https://www.citizensadvice.org.uk/consumer/alternative-dispute-resolution/settling-
out-of-court/using-alternative-dispute-resolution-adr/. [Accessed on 28 June 2018]
 Gov. UK 2018, Equality Act 2010: guidance. Available at:
https://www.gov.uk/guidance/equality-act-2010-guidance. [Accessed on 28 June
2018]
 ILEX 2018, The Legal System of the United Kingdom. Available at:
https://www.cilex.org.uk/about_cilex/about-cilex-lawyers/what-cilex-lawyers-do/the-
uk-legal-system. [Accessed on 28 June 2018]
 Law Teacher 2018, Most Important Source Of English Law. Available at:
https://www.lawteacher.net/free-law-essays/constitutional-law/most-important-
source-of-english-law-constitutional-law-essay.php. [Accessed on 28 June 2018]
 Marighetto, A., 2018. Arbitration, Mediation and Conciliation: differences and
similarities from an International and Italian business perspective. Available at:
https://www.mediate.com/articles/sgubinia2.cfm. [Accessed on 28 June 2018]
 Net Law Man 2018, Employment Rights Act 1996. Available at:
https://www.netlawman.co.uk/ia/era-1996. [Accessed on 28 June 2018]
 Out Law 2017, The adjudication process. Available at:
https://www.out-law.com/en/topics/projects--construction/adjudication/the-
adjudication-process/. [Accessed on 28 June 2018]
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 Parliament UK 2018, How laws are made. Available at:
https://www.parliament.uk/education/about-your-parliament/how-laws-are-made/.
[Accessed on 28 June 2018]
 Real Business Rescue 2018, How to Wind up a Company. Available at:
https://www.realbusinessrescue.co.uk/winding-up-petitions/wind-up-a-company.
[Accessed on 28 June 2018]
 SCE 2018, Construction contract and commercial consultants. Available at:
http://www.stevencevans.com/a-practical-guide-to-construction-adjudication/.
[Accessed on 28 June 2018]
 Work Smart 2018, What are the main health and safety regulations? Available at:
https://worksmart.org.uk/health-advice/health-and-safety/employer-duties/what-are-
main-health-and-safety-regulations. [Assessed on 28 June 2018]
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