Business Law: Legal System, Business Impact, and Dispute Resolution

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HNC Business (Cohort)

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Table of Contents
Introduction................................................................................................................. 3
Task 1......................................................................................................................... 4
Task 2......................................................................................................................... 6
Task 3......................................................................................................................... 8
Task 4....................................................................................................................... 11
Conclusion................................................................................................................ 12
Reference list............................................................................................................ 13
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Introduction
The legal system and the judiciary of the UK is one of the oldest and the most
comprehensive systems in the world, basing itself principally on the provisions of
common law. The cumulative sum of all the enactments and the statutes are
fundamentally segmented into two distinct categories, one being that of civil law and
the other being criminal law. Torts and tort like offences are also factored in, but
generally clubbed under the civil law system. The Supreme Court of the UK was
recently incorporated as the apex court, and the multiple senior courts and the
various tribunals including the courts of appeal, coroners’ courts, family courts and
so on act as supporting institutions in order to ensure a timely delivery of justice. The
Supreme Court was made into the highest court through the Constitutional Reform
Act in 2005 and was constituted in the Middlesex Guildhall. Previously, the House of
Lords held the position of the highest judicial authority, but currently undertake
executive functions primarily (McCrudden, 2017).
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Task 1
Explain the nature of the legal system (LO1)
Different sources of law
The system of law inside England, Scotland, Northern Ireland and Wales is
principally categorized into two sections, one being the primary sources including
enacted statutes, precedents and legislations and the other being secondary sources
including notable jurists’ opinions, points of argument, judicial anecdotes and so on
(Flynn and Hodgson, 2017). Certain European Union laws also apply to the UK
owing to its member state status, and this includes the European convention on
Human rights as well. The legislations that are enforceable by nature are passed by
the UK Parliament, which is divided into the House of Commons and House of
Lords.
Provisions under the common law: The provisions that exist within the UK with
regards to civil law are enactments that have been passed and enforced by the
Parliament, and include a multitude of judgements and opinions of the judiciary
based on the principle of rationality. They are relied upon heavily by advocates and
jurists to support their arguments and cases and act primarily as precedents. This
form of judicial system enables courts to ensure a timely delivery of justice as a
plethora of similar cases come up that can be decided solely based on judgements
that have been passed prior to the case (Walters, 2017).
Provisions under the civil law: The provisions related to civil law are inherently
present in order to address the various discrepancies that take place without any
entailment of criminal offences and related crimes. Civil law includes several aspects
including the likes of torts, commercial litigation, laws relating to companies and
revenue, tax related provisions and so on. Civil law in addition to criminal law forms
the crux of the overall legal system within multiple countries, including that of the UK
(Benton and Ford, 2018).
Common law and equity: Common law with regards to equity fundamentally serve
the purpose of writs, whereby Senior courts and appeal bodies pass decrees that are
either prohibit a certain course of action or enforce a certain course of action
depending upon the contingent situation. Cases relating to equity within common law
are typically overseen by the Chancellor of England, Scotland, Northern Ireland or
Wales based upon the territorial location of the incident (Teasdale, 2018).
Conventions of the Parliament: The conventions that are passed by the
Parliament and entail a degree of enforcement are fundamentally a set of directive
guidelines for individuals, agencies and institutions regarding the behaviour patterns
and limitations. These conventions include a host of regulations and relate to various
aspects and together with the various other judgements and enactments, they
constitute the uncodified constitution of the UK (Banakar, 2015).
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Application of statutory and common law in courts within the UK
Statutory and common law applications have been extensive within the UK overtime
and the country has been witness to some historic and landmark cases that have
gone on to shape the very nature of the system of judiciary (Parmar, 2017).
Statutory law can be thoroughly understood in a detailed analysis of the case of
Attorney General v De Keyser’s Royal Hotel Limited that took place in the year of
1920 during the first world war. The facts of the case primarily related to the DORA
(Defence of the Realm Act), 1914 and the Defence Act, 1842. Several soldiers had
trespassed into the hotel facilities in order to seek shelter within a warzone, and the
owners had subsequently filed for compensation and damages after the war ended.
The soldiers were of the opinion that they were acting under special constitutional
powers that were granted during emergency situations under the Defence of the
Realm Act, and the judgement too was passed favouring the Crown. However, an
appeal led to a reversal of the decision and payment of compensation. The landmark
judgement further established several regulations and guidelines that chalked out the
various specifics related to the exercise of special powers under privileges of the
Crown.
Common law has largely shaped the legal system within the UK and several other
countries, and a premier case law in this context is that of Donoghue v Stevenson
that took place in the year of 1932. Stevenson was a brewery owner, and apparently
had served a beer to Donoghue that contained a snail. Donoghue later suffered from
a severe case of gastric problems. The courts favoured Donoghue and entitled him
to receive compensation for all his medical expenses as well as recovery from
trauma and mental stress (Cotterrell, 2017).
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Task 2
Illustrate the potential impact of the law on a business (LO2)
Influence of legal provisions on a business enterprise
The various business organizations and enterprises that operate from within the UK
are subject to a multitude of provisions, enactments and regulations that govern the
several aspects that a business typically entails. This primarily includes laws relating
to employment, contracts, company regulations and competition.
Laws relating to employment: The various laws and statutory regulations that
relate to employment are focused on protective measures for the employees as well
as the employing institutions based on various scenarios of a difference in opinions.
Most of the provisions are codified in two statutes, which include the Pensions Act of
2008 and the Employment Rights Act of 1996 (Ryan, 2018).
Laws relating to contracts: The provisions that relate to contracts and contractual
obligations are essentially focused on removing any ambiguity in the case of an
inconsistency regarding the contract among the parties involved. The regulations are
strictly enforceable and include a host of case laws and precedents that relate to the
core statue of the Contract Act, 1999 (Ruskola, 2017).
Laws relating to company regulations: The various guidelines and regulations for
companies and business organizations are codified under the Companies Act that
was enacted in the year of 2006 (Schwarzschild, 2017). The statute largely deals
with the concept of corporate governance and mentions the various do’s and don’ts
that companies and business organizations must adhere to. Remedial measures are
also included within the statute in the case of an irregularity and non-compliance.
Laws relating to competition: The British economy was crippled significantly owing
to the presence of monopolies in a number of sectors. This is what led to provisions
and statutes that prevented hostile and predatory competition among massive
multinationals and smaller establishment. The guidelines are put down primarily in
the Competition Act of 2006 as well as certain portions of the Enterprise Act, 2002
(Ferguson, 2017).
Effectiveness of recent reforms and developments
Several reforms and developments have taken place within the overall judiciary in
the UK, and this has largely come in the form of statutory amendments and
legislative modifications. The changes can be classified on the basis of the
governments that presided over the UK, and this includes the governments that
functioned under Tony Blair from 1997 to 2007 and David Cameron from 2010 to
2016. The foremost and the most pronounced among the changes was the initiation
of the Ministry of Justice, which by all means served to replace the Constitutional
Affairs Department that functioned under the Crown (Croxford and Raffe, 2015). The
replacement further consolidated a number of governmental institutions under the
ministry and the primary objective was focused at increasing the level of
standardization as well as the degree of coordination and efficiency. The formation of
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the Legal Services Commission was another massive modification aimed at
improving the facilities for the poor classes within the UK (Flint, 2017). The
underprivileged classes typically faced a lot of difficulties in accessing the various
services of the judiciary and the legal system, and the commission aimed to
significantly enhance their accessibility and subsequently improve the overall
societal conditions. The government under Blair further facilitated the initiation of the
Tribunals Service along with the Commission for Judicial Appointment. These two
agencies would go on to significantly empower the judiciary and ensure a robust
availability of workforce that could be absorbed the by the judiciary. Several
government functions were also privatized to a large degree and this included the
development of private prison organizations and probation services. The next set of
reforms came about in the government under Cameron, and the most important
facets related to the creation of the Policing College to train individuals for the
country police forces and the statistical institution of the National Crime Agency. The
Family courts were also given separate existence measures and these included
significant alterations within the county courts as well.
The overall impact of these aforementioned reforms and developments significantly
empowered the overall legal system along with the judiciary and its associated
functionalities. The correspondence systems within the various agencies and
departments were also revamped to a large degree, and this eased the overall
process of communication between them. Previously, the judiciary was accessible
only by a handful of the population that primarily included the wealthy and the elite.
However, the developments brought about a policy of inclusion for the lower classes
as well, and this developed an equitable system within the judiciary in general.
Courts and session houses became extensively specialized, and this led to a
speedier delivery of justice in a timely manner (Jackson, 2016).
Differences between legislation, regulations and standards
The legal provisions that typically exist within the UK can be categorized into
legislations, regulations and standards based on their nature and degree of
enforceability. The legislations fundamentally relate to the statutes and laws that
have been passed unanimously by the UK Parliament. These are codified points of
law that require adherence by individuals and organizations alike, and any sort of
non compliance can lead significant legal repercussions. Regulations are quasi
judicial by nature, and are essentially guidelines that regulate the behaviour of
individuals and organizations and relate to various aspects like public decency,
privacy, powers and obligations of government officials and so on. Standards are
distinctly different from regulations and legislations, and typically relate to
organizations and the products and services they offer. The standards are typically
existent within the whole of the European Union, and apply to the UK as well owing
to its member state status. The standards are put forwards by standardization bodies
and institutions and are not enforceable by any means. However, the delivery of
products and services that do not comply with the standards are typically hindered in
order to ensure a certain level of quality for the consensus within the UK.
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Task 3
Examine the formation of different types of business organizations (LO3)
The organizations and enterprises that are formed within the UK have a host of
different options with regards to the legal structure of the institution based on the
various codifications and regulatory measures within the legal system. A broad
segmentation can be made on the basis of registration, and this includes enterprises
that are incorporated and those that are not incorporated. Incorporated organizations
have to officially apply to start the business with the Registrar of Companies under
British law, while organizations that are not incorporated or do not have a
compulsory mandate for registration include small scale sole proprietorship and
ventures based on partnerships and collaborations. Although unincorporated
businesses offer a larger degree of control, the risk factor is also relatively high when
compared to institutions that are registered and incorporated.
Incorporated organizations can be further divided based on the aspect of liability,
and they have been discussed below and are as follows.
Public Limited Company: These companies are listed on official and authorized
stock exchanges within the UK, and allowed to trade their stocks and debentures in
a public manner. Legal regulations require public limited companies to have a
minimum paid up share capital of £50,000 along with the appointment of a minimum
of two directors and one company secretary.
Private Company Limited by Guarantee: Private companies that are limited by a
guarantee include the concept of a mutually agreed upon warrantor and an amount
of guarantee that must be facilitated when the enterprise comes to a close. This
structure is largely implemented by charitable societies and associations including
the likes of labour and worker unions, community collectives and so on.
Private Company Limited by Shares: These types of companies are the most
popular choice for individuals within the UK and beyond owing to the fact that the
personal assets of the owners cannot be attached to the business entity. These
organizations have their capital divided into shares and debentures, which are often
paid to employees as a part of their salary with the objective of increasing
engagement and the sense of belonging.
Private Unlimited Company: Private organizations that opt for the unlimited liability
status are extremely risky as the personal assets and funds of the owners as well as
the directors can be appropriated in order to pay the stakeholders if the enterprise
comes to a close. However, certain institutions still go with unlimited liability
companies as they are not required to undergo annual audits as well as verify their
performance report by the Companies House. The secrecy can be beneficial for
certain organizations that aim to engage in disruptive measures of innovation and
transform an industry. The nature of unlimited companies enables them to keep their
selling points relatively well-hidden till the point of introduction of the product or the
service (Armour et al., 2017).
Voluntary organizations: Voluntary organizations are very different from the
aforementioned incorporated organizations. These institutions do not operate with
the motive of generating profits, but to improve the overall living standards within the
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society by addressing certain key issues that inherently exist within society and act
as a limiting factor.
Management and funding of business organizations
Business organizations within the UK rely on a multitude of funding measures in
order to initiate operations and set up the venture. The primary source of funding
with regards to modern organizations is the system of crowd funding. Individuals and
groups that want to start a venture pitch their ideas on crowd funding platforms that
are mostly digital and online by nature, and the users fund the business provided
they like the concept or develop a personal interest relating to the organization or the
product or service offered by the organization. A prime example of a successful
entity that generated millions is the organization of Oculus, which mostly deals with
the manufacturing and marketing of virtual reality instruments primarily for the
gaming and the entertainment industries.
Another very popular method of funding business operations is the concept of
venture funding using angel investors and serial investors. Businesses that that the
potentially to significantly transform a market or a sector are mostly the beneficiaries
of this system, and Alibaba would be a highly appropriate example of an organization
that scaled up immensely using venture funds and generates revenue in terms of
billions currently. The money that was collected by Alibaba was returned by Jack Ma
and associates in a matter of three years, as the company extended their operation
to over a hundred countries spread across the continents. Alibaba quickly became
the most dominant force with regards to organizations that cater to the supply chain
and its management, and the massive rise increasingly solidified the credibility of the
system of angel investing.
Personal equity is also a widely used measure to fund business operations as can
be witnessed in the rise and growth of the organization of Amazon headed by Jeff
Bezos. Entrepreneurs and individuals allocate a part of their saving and personal
funds and start the business, as was the case of Amazon after Bezos left his high-
paying Wall Street job and started the company as an online book store. The
company serves almost a million customers across the world on a daily basis and is
undoubtedly the most influential tech company in terms of the sheer scale of
operations in today’s times.
In terms of management and handling of operations, the strategies can be
fundamentally segmented into three different approaches, which include a functional
approach, a project based approach and the matrix approach. Functional approach
towards management refers to division within organizations based on
specializations, and this structure is followed by a majority of the organizations
around the world. Project based or projectized management approach refers to the
divisions being based on specific and particular projects. This enables the
organization to enforce a regulated direction for the employees and the teams in
order to achieve the objectives within their allocated timeframes. The matrix
approach is essentially a mix between the two, and the various teams and divisions
are spread out within the organization in the form of a network. The matrix structure
is highly suitable for organizations that want to improve their productivity quotient
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and imbibe a higher degree of operational efficiency (Hansmann and Kraakman,
2017).
Advantages and disadvantages of different business organizations
The primary advantage with regards to unincorporated forms of businesses like sole
proprietorships and partnership ventures is that the proprietor or the partner has
complete control over the business and the various implementations contained
therein. However, these businesses suffer from the risk of high liability for the
owners, as they are individually responsible for the failure or success of the
organization. This is more suitable for small scale operations with limited resources
and skill sets as it allows the organization to provide a highly customized and
personalized purchasing experience to the customer (Olsen, 2015).
Incorporated forms of business are the most prevalent within the UK owing to their
highly credible and regulated nature and the safeguard against the attachment of
personal assets of the owners with the exception of unlimited companies. The
primary disadvantage, however, relates to the financial implications and the
extensive number of formalities that they have to go through in order to maintain
their operations. Tax impositions are also a limiting factor, as they tend to be an
additional burden for organizations and significantly increase the core expenses
related to sustaining the operations.
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Task 4
Recommend appropriate legal solutions to resolve areas of dispute (LO4)
Alternative dispute resolution methods
Alternative methods of resolving disputes and conflicts are an excellent measure to
ensure an efficient system of delivering justice without specific intervention by the
courts of law. The key elements that comprise the system of alternative dispute
resolution include the likes of mediatory negotiation, executive tribunals and primary
neutral evaluations.
Mediation includes the presence of previously agreed upon individuals who act as
mediators in the case of a discrepancy between the parties involved in a contract or
an agreement. The individuals who are appointed as mediators typically belong from
a juristic background and enjoy a high degree of social reputation (Craig, 2016).
Executive tribunals are semi-judicial bodies that are governed by the judiciary and
essentially operate to enable a fast tract system of hearing and deciding cases. Their
primary matters relate to cases relating to issues in grants of political asylum,
irregularities in immigration and its associated policies, non-compliance of social
security measures and so on. These tribunals significantly reduce the amount of
finances and time required within the judiciary while effectively resolving disputes
within a short period.
Primary neutral evaluations or early neutral evaluations are exactly like the concept
of mediation, but the negotiations take place individually and each party presents
their point of view in an isolated manner. The evaluator provides a judgement based
on the arguments provided, and although not legally binding, the decision can often
provide a deeper insight with regards to the discrepancy (Clarkson, 2016).
Different sources of legal advice
The provision of legal advice is facilitated within the UK through various sources,
some of which have been discussed below and are as follows.
 Legal centres in the form of charitable associations.
 Citizens Advisory Forums provide assistance to those facing difficulties in matters
related to the judiciary.
 Legal Aid is the largest not for profit organization within the UK that assists
individuals in a variety of legal matters.
 Advocates and solicitors within the UK also take up matters without a cost
serving a pro bono functionality.
 Digital platforms are another excellent source of legal advice and this is facilitated
both by private organizations as well as the government, especially with regards
to civil matters.
 Governmental advisory bodies are also present throughout towns and counties to
benefit the rural population in various factors like registration and compliance
(Chambliss, 2017).
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