Legal Framework and Legal Solutions for Pegasus - Law Report

This report provides a comprehensive analysis of the legal framework, focusing on the English legal system and its sources. It delves into the status of drivers in the Pegasus case, examining employment law and the Pimlico case to determine their rights. The report advises Alex and Jay on forming a company, outlining the legal status, registration procedures, types of organizations, director roles, and capital-raising methods. Furthermore, it suggests alternative dispute resolution methods to resolve business disputes without litigation. The report covers primary and secondary legislation, case laws, and the division of law into civil and criminal branches, along with the process of an Act of Parliament. It also explores the nature of registered companies, different business organization types, and the steps to form a company, including the role of directors and various methods of raising capital. This report offers a detailed overview of legal concepts and practical solutions applicable to business operations.

The Legal Framework and
Legal Solutions

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
TASK 2............................................................................................................................................3
TASK 3 ...........................................................................................................................................4
TASK 4............................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Legal framework is the laws and legislation applicable in the nation which includes set of
rules, procedural septets, status which are established through common laws and government.
Legal solution means to provide techniques and measures to resolve commercial disputes under
the legal system. In the present report Pegasus is given details about the English legal system
which includes sources and division of the law and how an act of parliament is established. The
status of divers in Pegasus is determined with legislation and relevant case law. Alex and Jay are
advised on whether to form a company or not with presenting the legal status and procedure to a
register company, types of organisation, role of director and raising capital for firm. Pegasus is
given suggestions on how they can solve their business dispute without litigation.
TASK 1
English legal system
English legal system is one of the most accepted and essential system of EU and is
applicable in more than one nation. This system got authenticity as legislation in 19th century and
the first sources of this law was customs. This system is not in written format yet in UK.
Sources of law:
Primary legislation: This is primary power given to the Parliament to enact the laws
which are applicable to whole nation without any discrimination (What is an Act of Parliament?,
2018).
Secondary legislation: the local and public bodies are given delegated to form laws and
regulations on certain matter which are deemed by the parliament as requiring certain legal
framework. The regulations and legislation made by these bodies are applicable to particular
community of group of people.
Case laws and precedent: the decision pronounced by the in a court proceeding get a
biding effect with doctrine of judicial precedent. The decision so passed must be referred by the
lower court on the cases with similar subject matter.
Common laws: The common law is an important source of key legal principles,
particularly in relation to the preservation of the rights of the individual against the state and the
rule of law. The common are formed with taking relevance from the local customs. This is the
fist source of law for UK constitution.
1

European union: UK is member nation of EU and all those laws and statues applicable
in UK as well. The regulations, directives and decision of the court of Justice of EU are also
directly applicable to UK.
Division of law:
Civil law: This is a branch of the law which deals with the matter of civil wrong done to a
person or business by another individual or organisation, the law deals with matter which are
less serious in nature and do not involve a harm to the society as a whole. This deals with cases
related with family dispute, divorce, adoption, claim for personal injury, tort of negligence,
dispute under employment law, labor unions, breach of contract etc. Under this a part which
suffered damages is given justices by rewarding damage claims.
Criminal law: This branch of the law deals with matter which are more serious in nature and
these matters are referred as criminal offenses.
Act of parliament: this can be defined as the primary power given to the Parliament to enact
law and status. Before, presenting a bill to parliament for making law it is approved by cabinet
minister. In the Parliament the process goes like:
First reading: The bill is presented to all member of house of common and title is read out at
this stage.
Second reading: here, matter of the bill is discussed in detail and debated is carried out on
principles of the bill and voting is done for giving approval or disapproval to the bill (How does
a bill become a law?, 2018).
Committee stage: here, changes and suggestion are given by member of house of common
related with bill.
Report stage: the suggested amendments are voted out here, for making changes in the bill.
Third reading: the final draft of the bill with all amendments is approved by way of voting and
giving assent.
Approval from another chamber: with getting approval from house of common, bill is
presented to house of lords for getting the consent. Same procedure is carried out for assenting
the bill.
Turning a bill into law: once approval from both houses is taken, bill is pretense to Monarch
fro getting a formal approval and with this consent the bill is converted to a law.
2

Tracking: the fact of applicability of laws and regulation and there effect on the business
can be determined with keeping a track of the laws and legislation that are applicable of business
its operations and activities such as company, employment, contract, health and safety etc. The
business must keep a significant eye on changes and amendment made in those laws as it is
essential to know the change and organization must make abide by those changes and take
measures accordingly.
Problem associated with Legal system of UK:
 One of the main issue faced by UK law is that its constitution is not present in the written
format.
 The legal system of UK is adversarial, this means the producer to carry out trials in UK
differs from all over the world.
 The law system in UK more relies n the common laws when compered to other nation in
the world.
 In Britain, to decide a case jury system is used rather than pronouncement of the decision
by a singe judge or a bench of judges.
TASK 2
Employed:
An individual is considered to be an employee or worker of an organization when that
person works for minimum hours in a day and gets paid for the hours worked. The activities
and work is supervised and guided by the team leaders or supervisors (Adams, 2016). For
performing the work of the organisation, they are provided with tools, equipment and material by
the business only. The employees have employment contract with employer at eligible for all the
rights defined under employment law.
Self-employed/Contract employment:
The status of a person as self-employed is determined with the fact as absence of
employment contact rather, agreement is there defined terms and condition to carry out the
work. The working hour are decided by the contractors and they bring all the tools, material
and equipment required to complete the job. They work on the behalf of the organisation on
contract basis and are not eligible for any employment rights adhered to an employee or worker
of the business.
Employment rights: Rights of employee under employment of an organization:
3

 Getting paid at least the national minimum wages.
 Receiving a written statement clearly stating the basic details and terms and conditions of
employment.
 Receiving pays lip for detailed breakdown of the pay.
 Employee must not be discriminated against in the workplace.
Pimlico case:
In this case, laws suit was filed by the Gray Smith against Pimlico Plumber who was
working with the organisation for six years. On his dismissal from the firm, Smith filed case and
brought claims for unfair dismissal, wrongful dismissal, sick pay, holiday pay, arrears of pay and
disability discrimination. It was held by the court of Appeal with taking in the considerations gig
economy cases, that Smith was classified as worker or employee of the organisation was eligible
for making claims for disability discrimination, holiday pay and arrears of pay.
Status of the workers:
With decided case of Pimlico plumbers and concept of gig economy, it has been
concluded for the given case study of driver of Pegasus, that divers are employee of Pegasus.
This has been decided as the driver were working on terms and condition of Pegasus and they
were provided with vans and other materials to deliver the products. They are eligible to all the
employment rights which are given to employees or worker of the organisation.
TASK 3
Nature of a registered company:
On registration a company get a status of Legal personality, as getting an identity of its
own separate from-its owners, members and shareholders. The company have its own separate
assets, property, obligations and liabilities (Adams, 2016). This status of legal personality to a
company was given after Solomon v solomon case. In this case doctrine of corporate personality
was upheld by the court. The concept of separate legal personality was stated in the Lee vs lee
case, and this case reasserted that a company is separate legal entity away from its directors and
members. Inn this it was held that a director could be under employment contract with the
company which is owned by that person solely.
Types of business organization:
4

 Sole proprietorship: this type of business is owned and operated by a single person, that
person have full right over the profits earned and is liable for all the business obligations
solely. They are not required to abide by major statutory obligations.
 Partnership: This is a business where two or more person come together to carry on a
business, trade or commerce. There are two forms of partnership in UK, unincorporated
and limited liability partnership. The former one is not registered under the statutory
legislation and later one is registered under the Companies House.
 Corporation: This are the business registered under company's Act, 2006. Under this
liability of the directors and shareholders are unlimited to the extent of paying the debts
of the organisation in case on insolvency or dissolution of the firm.
 Limited liability company: Main feature of these types of companies are that they
afford the owners and the directors' protection of their personal wealth (Adams, 2016).
The assets of the directors and shareholders are largely safe and are not seen as belonging
to the company, they have limited liability protection.
Steps to form a company:
 Subscribing MOA: All the member of the company must subscribe to memorandum of
association (Adams, 2016). This charter contain the details all the members, name and
address of the registered office of the company.
 AOA: the article of association of the company is another statement which contains all
the term, conditions and principle of running the company.
 Statement of shareholding: this statement defines the amount of share capital issue and
subscribed.
 Statement of compliance: this contains the details about the laws and regulation which
are adhered for formation of the company and all of them are duly abided with.
 Name of the company: the name of the company must be such that do not resemble with
name of already registered company, logo, trademark etc. It shall not represent any
national or international flag, sign, logo. It must not hurt sentiments of any person or
community.
Role of directors:
 To act within power given to him through charter of the company.
5

 Ensure to promote the success of the business by promoting growth and profitability of
company.
 Power to work independently and make decision on their own discretion without getting
influenced by any other individual or firm.
 To apply reasonable care, skill and diligence with application of knowledge and
experiences in business operation.
 Avoiding clashes of personal and business interest. Directors must give preference to
professional and business interest over their personal interest.
 Not taking any benefits from third party under the capacity of directors or for being in
the position of the director.
Raising capital:
In UK share capital can be raised through:
 Friend and family
 Angle investors
 Venture capitalist
 Crowdfunding
 Government grants and loans
 Bank loans
Conclusion:
Alex and Jay are advised to register Pegasus as a company and with this, Pegasus will
get a status of separate legal entity with its own asset, property, rights and obligations. The
company can get funds from different sources defined above and Ales and Jay are provided with
duties and responsibilities as directors with registration of Pegasus.
TASK 4
Alternative dispute resolution (ADR):
This is a measure followed by business organisation to solve the commercial disputes
without going to court. This is an alternative form against litigation process with avoiding the
court procedures and solving the disputes. This method is more preferred in the present times by
the firms as this involves less money and time of parties to dispute (Adams, 2016). This process
is less formal in nature and parties can reach a decision with mutual understanding and amicable
discussions. Under ADR methods, parties get to involve in the dispute settlement process unlike
6

in the court proceeding there is no involvement of the parties. Different types of ADR are
Arbitration, Mediation and negotiation.
Arbitration:
This is most practiced methods of ADR as this provided legal binding effect to the
decision given regarding a business dispute. Under this method an impartial third person is
appointed as arbitrators and can be appointed by court or parties to dispute. For referring an issue
to arbitration, clause must be entered in agreement that present or future dispute will be referred
to arbitration only (Adams, 2016). With this, parties gave up their right to appeal against the
order in the court. Arbitrator pronounces a decision after taking into account all the evidences
and view of both the parties and conducting a deep investigation in the matter. The decision
passed id final and have a binding effect on both parties and they cannot appeal against such
decision in court.
Legal advise:
The suggestion is given to management of Pegasus that they must go ADR methods
instead of referring their business dispute to court as getting the legal advice is quite expensive
and litigation process are very lengthy and time consuming. They must go for arbitration to solve
their commercial dispute and this can be done by entering a clause of arbitration in all business
agreements.
CONCLUSION
From the above report it can be concluded that legal system in UK is very old and it got
its first laws from the customers. The divisions on law has been identified as criminal and civil
and sources has been determined as act of Parliament, customs, EU and decided case laws. The
employment status of the divers of Pegasus is determined as employees. It has been advised to
Alex and Jay that they must register their business as a registered company as with this it will get
a status of separate legal entity having its own rights, property, asset, liabilities and obligations.
Pegasus had been advised to go for arbitration for solving commercial disputes rather than
referring the case to court.
7

REFERENCES
Books and Journals
Adams. A, 2016. Law for Business students. 9th Edition. Pearson; pp. 71.
Adams. A, 2016. Law for Business students. 9th Edition. Pearson; pp. 75.
Adams. A, 2016. Law for Business students. 9th Edition. Pearson; pp. 107.
Adams. A, 2016. Law for Business students. 9th Edition. Pearson; pp. 418.
Adams. A, 2016. Law for Business students. 9th Edition. Pearson; pp. 507.
Adams. A, 2016. Law for Business students. 9th Edition. Pearson; pp. 532.
Online
What is an Act of Parliament?. 2018. [Online]. Available through
:<https://www.parliament.uk/about/how/laws/acts/>.
How does a bill become a law?. 2018. [Online]. Available through
:<https://www.parliament.uk/about/how/laws/passage-bill/>.
8