Legal System, Business Impact, and Dispute Resolution: A Report

This report delves into the intricacies of the legal system and its profound impact on business operations. It commences by elucidating the nature of legal systems, highlighting the English legal system as a common law model, and emphasizing the core principles of justice, fairness, and equality. The report then explores the potential impact of various laws, including employment law and international trade regulations, on businesses, illustrated by the Pimlico Plumbers case and the gig economy. Furthermore, it examines different types of business organizations, such as sole proprietorships, partnerships, and limited companies, and emphasizes the importance of adhering to legal and regulatory frameworks, especially the Data Protection Act 2018, to ensure data privacy and customer trust. The report concludes by underscoring the significance of legal compliance and effective dispute resolution mechanisms for sustainable business practices.

The Legal Framework
and Legal Solutions
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Table of Contents
INTRODUCTION...........................................................................................................................3
LO1 Explain the nature of legal system.......................................................................................4
LO2 Potential impact of the law on a business ...........................................................................5
LO3 Different types of business organisation.............................................................................7
Types of business organization: ..................................................................................................7
Forms of organizations are influenced by legal & tax issues and personal & financial concerns.
There are different types of organizations, they are described below:........................................7
LO4 Appropriate legal solutions to resolve areas of dispute.....................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
Books and Journals....................................................................................................................11
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INTRODUCTION
Legal system consist a formal process or a procedure in which enforcing and elucidation of
law is elaborated. This system defines basic rights and responsibilities in many different ways.
There are mainly three form of legal system that includes civil law, religious law and common
law. Main rationale of a legal system is to resolve a disagreement in a systematically, orderly and
predictable manner. Legal system acts as an most important part in any business framework as it
provide a formative guideline in which a manner is given of what is firmly accepted in a society.
It is important for an organisation or a business group to abide all the necessary laws and
regulations in order to avoid conflicts and accept occurrence of change in a society in an easy
manner. In this report discussions has been made on, nature of legal system along with potential
impact of law on a business. In addition with this, project covers creation of various types of
business organisations and suitable legal solutions to resolve areas of disputes.
TASK 1
Explain the nature of legal system
Main purpose of a legal system is to offer a well orderly, systematic and predictable
mechanism to solve disagreements.
English legal system: English law is universal legal law system which is being followed in
provinces of England and Wales. This law mainly covers three important prospects that include
civil law and criminal law. In this every branch owns their courts and procedures. This law is
mainly consider as original of the common law and are commonly based on those values.
Main principles of the legal system:
There are mainly three major principles of a legal system that include justice, fairness
and equality before the law. The legal system lawmakers of United Kingdom strive to
accomplish equivalent outcomes for all and protection of their citizens in an equal manner and
make fair decisions. In context with company it is important to abide all necessary legal doctrine
framework set by UK government in order to perform their operations in a provisional manner
without facing any legal hindrances.
Effectiveness of the legal system:
Well- functioning of legal system in an organisation not only protects rights of customers
but it also offer fair judgement criteria. By abiding all legal and regulatory laws can effectively
ensure treatment of their disputes in a neutral way without facing any kind of biases form any
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other party. Thus, effectiveness in legal system ensures quick resolution of issues without facing
any exorbitant costs.
Online business units deal with their customers through app and websites. In this
consumers place via their website and app. Therefore, in order to protect customers data and
information a law has been proposed by UK government named The Data Protection Act 2018 ,
as per this law companies those who operates their business operations via online mode are
required to protect interest and information of their law from being get misused. It is necessary
for organisations to abide this legislation as it may affect its business operations in many ways.
Mentioned below description of law is provided:
Data Protection Act 2018:
This law was come into force on 25 May 2018. As per according to this law which is
implemented by UK’s governance body in which it is necessary for all business organisations to
use information of their potential customers in fair, lawful and transparent way. Therefore, it is
important for Company to abide in law in a possible manner as it will benefit them to build
beneficial relationships with their customers and help them to expand their business in many
different locations of London. There are many important concepts framed by UK government
which is covered under this law which is briefly disclosed below:
 It is important for a business organisation operating their operations through online
website to provide information to government in a way in which they share and collect
information about their customers.
 In addition which this, as per according to this law, it is important for other related
business organisations to give a record to government in relation to a manner in which
consumers process review and change their personal information on company provide
websites and app security.
 Along with this, it is necessary for company to provide government information about
effective date of their policy and description of any further change.
In order to conduct business operations in best effective and legal way it is important for
Company to comply with this law. For this they are required to set up a privacy policy on their
websites and make their consumers and other related websites users agree on it when there is a
need to collect information about them. Non compliance of this law affect company as managers
and directors of company cab be held criminally liable. Along with this Non fulfilment of the
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Data Protection Act 2018 results in enforcement notice that prevent company to process their
data in an effective way. Therefore, company is required to handle information of their potential
customers in a best possible way in order to build good reputation of their business and build
confidence among their employees.
Division of Law
Criminal Law: This is that aspect of law which is associated with crime. It proscribe
course of action that is believed to be harmful, threatening, harmful or endangering to welfare,
safety, health, property of people.
Civil Law: Also known as civilian law, this is known to be a legal system which has its
origin owing to Europe, and is believed to be intellectualized in scaffold of Roman Law.
TASK 2
Potential impact of the law on a business
There are different types of law that affect a business in many different ways.
Government mainly classified regulations into four different categories that includes,
international trade, employee relations, taxes and bureaucratic. Pimlico case is considered as
landmark case which can be used to check the status of whether the drivers of K are self
employed or worker.
The case has witnessed impact on entities who has engaged huge numbers of individuals
on a self-employed basis, including those operating in 'gig economy'. In the case of Pimlico
Plumbers, there was plumber named Gary Smith who was working on a self employed basis with
Pimlico for almost 6 years. A case was filed by Smith in employment tribunal about the claims
made by the company. Pimlico stated that Gary was working as a freelance and was under no
obligation to accept or reject a specific work or to leave and join other employer in case of non-
availability of work, hence, should not get any employment rights.
Gig Economy: It is an economy which is a free market system within which positions in a
temporary manner are common. In this companies made contract with workers those who are
independent as an short term engagements.
The case was taken to Supreme court which contended that, Gary Smith was a worker
because of the rules and administrative control by the company. SC held that, Gary and other
plumbers were controlled by the company wherein minimum wages and hours to work have been
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decided by it. Further, it imposed a restriction on them to not to join and work in a company of a
competitor operating in the similar business sector. Also, company asked him to do work by
himself even though he had a option to pass the work on another worker of Pimlico.
Furthermore, staff was bound to wear uniforms and drive vehicle which has the name of
Pimlico. Supreme court examined all the evidence and taken into account the surroundings. The
decision was given that Gary will be treated as a worker and will be provided all employment
rights under Employment Rights act.
The judgement passed by Supreme Court was right which was accepted by UK
organizations and provided relief to self-employed staff who was deprived of employment rights
even after absolute control over the activities of such worker. It was a win-win situations for
worker as they were given the status of a worker. This given protection to them, as they can
approach employment tribunal for seeking justice by praying loss or damages that have been
suffered by them.
Apart from this, there are set of rules and regulations along with examples that affect
business operations which have been mentioned below:
 If there is a change in any business law that has been implied by a company then the
whole way to operating a business changes. For example, Taxation policy in this, rise in
corporate taxes bring increase in costs.
 In the context of employment law business law adversely affect relationship among
employer and an employee or vice-versa. For example, in context with a company it is
important for company to abide all legal and necessary government regulations relating to
employee treatment and their hiring mechanism.
 As company is planning to expand their business operations it is necessary for company
to follow law of international trade tariffs. In this guidelines have been mentioned as
according to which company is required to offer their products at international market.
 Along with this, business law impact company code of ethics and a way in which they are
required to ensure safety of their consumers.
 Lastly, as company is looking forward to expand their operations in other residential
areas of London suburbs it is required for them to effectively understand the business law
of each locality. Although, it is bit hard to apply all the laws in a particular line of
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business as it turns out to be expensive. Therefore, with the help of business lawyer
company can direct their operations towards success path without breaking any law and
ensuring formative relationships with their employees.
TASK 3
Different types of business organisation
There are various types of business organisations performs their operations in a formative
manner with a common purpose to gain benefits in different forms. In context with the present
case study, it has been advised to company by its accountants that setting up a limited company
in order to perform their operations in effective way. As per Saloman v Saloman acts as most
important decision within corporate law. This is one of the most important decision that has been
made by English courts in which court order Saloman to pay the debts.
Types of business organization:
Forms of organizations are influenced by legal & tax issues and personal & financial
concerns. There are different types of organizations, they are described below:
Sole Proprietorship:
It is defined as individual doing business. It is not a legal entity. Individual himself is
responsible for expenses and debts which occur in this business. Cost of start-up and operational
overhead is low. Profit is of owner and it is not shared with anyone else. But there are certain
drawbacks also which includes unlimited liabilities like if there are any kind of debts than all
claims will be made against individual and it will be complicated to raise capital by own.
Partnership:
It is created among two or more people who share all kind of financial resources which
are required within business. Each individual is responsible for debts. When partnership is
agreed upon then agreement has to be placed to which each individual must agree upon. Cost of
start-up is shared and equal shares are managed. Major drawback of this business is that there are
unrestricted liabilities like personal assets can be used for paying debts; it becomes difficult to
find appropriate partner and many more.
Corporation:
They are dominant form of business. It is a legal entity which is different from individual
entities. Public corporations belong to shareholders who have elected members of board of
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directors to carry out primary responsibilities. Capital can be raised by sale of stock, ownership
can be transferred by selling of stocks and liabilities are restricted. It has various drawbacks such
as taxation is double when taxes are paid by income tax returns, organizational and operational
cost is high.
Private limited company:
A company which offers restricted liabilities and legal protections for their shareholders but
posses certain restrictions with respect to their own ownership are referred to as private limited
companies. These restrictions are addressed by rules and regulations which include:
 Shareholders cannot sell their or even share their shares with public during stock
exchange.
 Shareholders cannot transfer and sell their shares without being giving option to other
shareholders for purchasing them.
 Number of shareholders is fixed normally 50, this number cannot be exceeded.
Advantages of Private limited companies: There are certain vantages, they are mentioned
below:
 Ownership: Shares can be transferred and shared by the choice or will of owner.
Their shares are present with management, founders or private investors. This means
that there is less confusion and complexity with respect to management and decision
making proces.
 Least number of shareholders: Private Company has 2 shareholders but in case of
public companies there are around 7 shareholders and it is a minimum count.
 Legal formalities: They are time consuming and costly for private limited
companies but when compared with public companies then they seem nothing.
 Disclosing of information: Private limited companies do not need to share their
financial reports with public or anyone else but public companies have to share these
reports quarterly with public as they have wide impact on public investments.
 Management and decision making: It is more complicated in case of public
companies as more number of shareholders is involved and it is necessary to consult
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each one of them. This process is reduced in private limited companies as there is less
number of shareholders.
 Focus of management: Management of private companies is concerned with short
and long term decisions; they do not implement strategies for enhancing value of
shares as they know by their decisions, there will be strong impact on them.
 Stock market pressure: They are not pressurized as they work by considering all
rules and regulations formulated by governing bodies in which they operate.
 Minimum share capital: In case of private limited companies there is no compulsion
to have minimum number of shares, as this number is not fixed. This implies that
there is no pressure related with requirements of fund.
 Confidential: It is not suitable that competitors must know about shares, strategies
and processing of organization. Confidential information comprises of legal
settlements, executive compensation and other important information which cannot
be protected in case of public organization. This information is highly secured in
private limited companies.
TASK 4
Appropriate legal solutions to resolve areas of dispute
There are three ways with the help of which disputes in a business can be effectively
resolved that include, Litigation, Arbitration and Mediation. All these modes of resolving
disputes are described below:
Litigation:
In order to resolve dispute when parties does not reach to a agreement in a negotiating
way court litigation acts as an most effective way. In this method disputes related to business are
resolved in a court if there is a need. As per this dispute resolving method, it is important for
engaged parties to have quite same business relationship. Along with this, in order to resolve a
resolve via this method it is important that both involved parties speak same language, reside in
same country and share common cultural background.
Arbitration:
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In this method of dispute resolution, third neutral party acts as a judge in order to resolve
a dispute. In this arbitrator effectively listens for both parties and by evaluating presents evidence
decides binding decision. This method is less expensive.
Mediation:
This is a method of dispute resolving in which both parties agreed to solve their dispute
by taking the help of mediator which is an unbiased individual. In this mediator effectively tries
to analyse needs of both engaged parties and decide a conclusion in order to help both the parties
to reach an agreement. In this, if the parties are not satisfied with the mediator decision or they
fail to reach to an agreement then parties can further move towards court or arbitration.
A.D.R: Alternative Dispute Resolution is a process with the help of which disputes can
be settled without any kind of litigation like, negotiation, arbitration and mediation. This method
is mainly less costly. Arbitration is mainly a simplified version in a trail that mainly involves
limited discovery along with simplified evidence and rules.
CONCLUSION
As per the above mentioned report it has been conclude that, legal system is a procedure
in which detailed interpretation and enforcement of law is done. Legal system consists rights and
responsibilities that are elaborated in a many different ways. It is important for company to abide
all legal ways including employment law as to conduct their operations in an effective way along
with this, it is important for company to understand all other providences law and regulations as
to expand their area of functioning. In this report different types of organisations is covered
along with impact of law on business. Lastly, with the help of many types of dispute resolving
methods company can able to solve their disputes.
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REFERENCES
Books and Journals
Adams. A, 2010, Law for Business Students, ( 6th Ed.) London, Person Publishing Barling
Gasson. D. Learning Materials for HNC KCB moodle
Jones. L, Introduction to Business Law ( 4th ed) Oxford. Oxford University Prress
WWW.ROSSMARTIN. CO. UK/ employers
WWW. Parlament. co. uk
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