Legal Systems and Business Impacts: Analysis and Solutions in the UK

This report provides a detailed analysis of the UK legal system, focusing on its impact on businesses. It begins by explaining the concept of parliamentary sovereignty and the various sources of UK law, including precedents, acts of Parliament, international and European courts, common law, and customs. The roles of barristers, solicitors, and judges are also clarified. The report discusses the government's role in law-making, detailing the legislative process from bill introduction to Royal Assent, and how statutory and common law are applied in justice courts. The effectiveness of the legal system is evaluated in terms of recent reforms and developments. Furthermore, the report illustrates the potential impact of company, employment, and contract law on businesses, using specific examples and differentiating between regulations, legislation, and standards. It also provides appropriate legal solutions for a range of business problems, justifying their use and assessing their positive and negative impacts. Finally, the report recommends appropriate legal solutions based on alternative legal advice, comparing their effectiveness and critically reviewing their use.

Business Law
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Contents
Introduction........................................................................................................................4
Section 1 – Nature of legal systems and legislations impacting businesses....................5
LO1 Explain the basic nature of the legal system.........................................................5
P1 Discus the meaning of the statement ‘Parliament is sovereign’ and the various
sources of UK Laws....................................................................................................5
P2 Explain the role of government in law-making and how statutory and common
law is applied in the justice courts..............................................................................6
M1 Explain the effectiveness of legal system in terms of recent reforms and
development...............................................................................................................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....................................................................................................................9
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.
..................................................................................................................................10
Section 2 – Legal solutions to business problems..........................................................11
LO3 Suggest appropriate legal solutions to business problems.................................11
P4 Suggest appropriate legal solutions for a range of business problems..............12
P5 Provide justifications for the use of appropriate legal solutions..........................13
M3 Assess the positive and negative impacts of legal solutions to business
problems...................................................................................................................14
L04 Recommend appropriate legal solutions based upon alternative legal advice
provided........................................................................................................................15
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P6 Recommend solutions based on a country’s legal system and /or a different
framework.................................................................................................................15
M4 Compare and contrast the effectiveness of these solutions..............................16
D2 Critically review and evaluate the use of appropriate legal solutions in
alternative advice......................................................................................................17
Conclusion.......................................................................................................................18
References.......................................................................................................................19
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Introduction
A state may comply with regional legislature, international laws or a federal constitution
but normally the ultimate source of law is the central national legislature. In UK,
Parliament has the supreme authority to enact law. In this report, various sources of
English law including legislature have been discussed. Such laws must be complied
with by business, people and societies wherever applicable. Amongst them, the laws
applicable on business have been discussed in this report through different case
scenarios and the companies have been recommended alternate legal solutions. The
alternate methods of dispute resolution have also been discussed.
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Section 1 – Nature of legal systems and legislations impacting businesses
LO1 Explain the basic nature of the legal system.
P1 Discus the meaning of the statement ‘Parliament is sovereign’ and the various
sources of UK Laws.
It can be stated that ‘Parliament is sovereign’ in UK. It is the principle of the UK
constitution and refers to an unwritten constitution. Sovereign is a state where
individuals live, and laws are framed by the government. It is the extent of authority that
can be held by the legislative body and imply the issue of national sovereignty. The
concept of sovereignty makes the parliament supreme authority in the UK that helps to
form and end the law.
Sources of law:
Sources Description
Precedents It is can be termed as the authority and a
rule that can be established in the
previous case. It can be persuasive and
binding for court at the time of deciding
the case with the same facts and issues.
Acts of parliament These are the statutes that can be
passed by the legislature and known as
the primary legislation. It creates the new
law and modifies the existing law. It can
be approved by both houses and assent
are given by Monarch (Merz, 2018).
International court These courts are formed by the treaties
among various nations. And has the
authority of international organist ions like
united nations. It also includes the
different tribunals and excludes the courts
that arise from the national authority.
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European court It refers to the court of European Union;
Court of justice that can be considered as
the EU’s highest court, general court etc.
European law is the member and a part
of the union. The regulations, laws are
framed by the union and applicable to the
organizations.
Common law It can be termed as the body and that can
be derived from the judicial decisions of
tribunals and courts. It influences the
process of decision making in case where
the conclusion cannot be determined by
the existing statutes.
Customs It is the pattern of behaviour that can be
verified within the members of
community. It exists where the legal
practice can be observed or the law of
opino juris can be recognized (Dodd and
Hanna, 2018).
Role of Barristers, solicitors, judges:
Barristers Solicitors Judges
He/she is the advocate
that can practice in high
court. When issues
escalate in the system of
the court the lawyers are
Solicitors are the legal
practitioner that handles
the legal matters. They
also provide the advice
and support to their clients.
Judges have the authority
to preside the proceedings
of court. They hear the
witness and interpret the
laws and provide the
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known as the barristers. judgment to parties.
P2 Explain the role of government in law-making and how statutory and common
law is applied in the justice courts.
Role of Government in Law making
The law is enacted when it is passed by both Houses of Parliament i.e. House of Lords
and House of Commons. The members of these houses are appointed by government.
A bill is introduced by members of Parliament, and when this bill gets approval of both
houses of Parliament and Royal Accent, it becomes an Act. Following procedure is
followed for a Bill to become an Act:
First Reading: This is the first step where title of bill is introduced and published after
the reading is done.
Second Reading: This is the second step of law-making by Parliament. In this step, in
House of Commons, a debate is carried by members of House on contents of Bill.
Committee Stage: This is the third stage where a detailed examination of the bill and
its contents is carried in the House of Commons by its members and in case any
amendments are required to be made, they are incorporated in bill (Schmidt, 2013).
Third Reading: This is the fourth stage where the members of House of Commons vote
on the final bill and if the majority of members passes the bill, it is sent to House of
Lords for approval.
Proceedings in House of Lords: This is the stage where the members of House of
Lords examine the bill and suggest if any amendments are to be made. In case, any
amendments are suggested, the bill is sent again to House of Commons for approval on
such amendments. Unless all the contents of bill are not agreed by members of both
houses of Parliament, the bill keeps moving back and forth in both houses. When it is
approved by both houses, it is sent for Royal Accent.
Royal Accent: A bill cannot become an Act unless it has received Royal Accent.
Therefore, when it is approved by both the houses, it is sent for Royal Accent. The bill
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becomes an Act when the Royal Accent is received. After such Accent, the bill becomes
enforceable (Rab, 2018).
Application of laws in Justice Courts
Statutory Laws: For the application of statutory laws in decision making, the judges
determine the controversy between parties and establishes their legal relations, duties
and rights using the laws which governs their case, then decides the case by awarding
compensation, charging penalties or awarding other legal punishments as defined by
statute for that case (Ndzi, 2017).
Common Laws: In certain cases, there is no statutory law, or the interpretation of
statutory law is not clear. In such cases, the decision of judges is influenced by cases
decided of similar nature by other courts or new laws are enacted called as common
laws. For instance, the rule established in case of Rylands v Fletcher was used by
courts in deciding Transco Case.
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M1 Explain the effectiveness of legal system in terms of recent reforms and
development.
The effectiveness of legal system can be obtained by adopting the various reforms and
developments. There should be establishment of a tribunal that provides the speedy
trial and parties resolve their cases in a quick manner. There are various reforms that
render the effective legal system such as reform of company laws, constitution of the
county court (Anderlini, et.al., 2016). They also provide the legal aid to the people who
can’t afford to pay for their legal cases, through this also legal system can be effective.
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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.
Following are the Act applicable on business that have potential impact on its
operations:
 Health and Safety Regulations: The Act sets general duties on employers and
directors in relation to health and safety of their employees at workplace. This Act
defines a structure that must be followed by employers and implemented in a
way that employees are provided a safe environment. The employer must take
precautions and comply with standards specified in Act in relation to use of
harmful chemicals, emission of harmful gases, and other similar requirements
(Jilcha, and Kitaw, 2016). In given case, the directors of JPM Publishing make
adequate arrangements for compliance of provisions of this Act.
 Equal Opportunities Regulations: All the employees of company must be
given equal opportunities and no employee must be discriminated on basis of
caste, sex, religion, marital status, disability, etc. The Equality Act, 2010 is the
Act applicable for protection of employees from discrimination at workplace. This
Act outlines the responsibility of directors to ensure that all employees are
treated equally and are not discriminated on any basis (Bain, 2016). In given
case scenario, JPM Publishing must comply the provisions of this Act to avoid
any penalties or legal consequences. The procedures under this Act must be
followed by directors to keep the employees motivated and protect them from
any kind of discrimination.
 General Data Protection Regulations (GDPR): All companies in United
Kingdom (UK) are required to follow EU General Data Protection Regulation
(GDPR) for the protection of data collected from customers, employees or other
people. Since, UK is a member of European Union (EU), it is required to comply
the regulations stated by EU in this regard. These regulations have superseded
UK Data Protection Act, 1998. Under these regulations, rights have been given to
individuals to exercise control over how the data is collected, processed or
utilized. This helps the company in improving its information security, and brand
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image. The reliability on company also increases (Burri, and Schär, 2016). In
given case, directors of JPM Publishing are required to install adequate
programmes and software as required under these regulations for protection of
data and ensuring better governance.
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M2 Differentiate and analyse the potential impacts of regulations, legislation and
standards.
Legislations are the directives placed by a governing body or government on people
and organizations of a selected community or state. These are passed by Parliament.
These must be complied with by all the people and organizations for avoiding any legal
consequences. Regulations are specific requirements and procedures that must be
followed for compliance of legislations. The support the requirements of legislation and
establish the way in which laws shall be implemented. Standards are the
specifications, guidelines and requirements that must be complied with for ensuring
good quality, efficiency and safety of any product or services (Schmidt, 2013).
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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 laws of any country, society or community must be strictly implemented and
followed by all the members and organizations of the place wherever such laws are
applicable. The English Legal System has three separate legal systems divided into
England and Wales, Scotland and Northern Island. The judicial system of UK prevents
the executives or states from exercising their powers in an unlawful manner. It requires
the state officials such as police to act within their authority and provides a right to
individuals to perform any act or say anything which is not particularly prohibited by law
(Anderlini, et.al., 2016). The citizens of country have a right to fair hearing and the
justice is given to all equally without any discrimination.
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Section 2 – Legal solutions to business problems
LO3 Suggest appropriate legal solutions to business problems.
P4 Suggest appropriate legal solutions for a range of business problems
Case 1
Facts of case: Champion Ltd. was operating in London which was paid to shift from its
location. The company faced financial problems as such shift has resulted in decline in
customers of company. Therefore, the company is unable to pay off its debts. Now, the
creditors of company are threatening to apply to court for winding up petition.
Question Involved: The company wants to know the powers of creditors for application
to court for winding up.
Applicable laws: Under UK laws, the procedures relating to companies and their
winding up are guided by Insolvency, Act 1986 and Companies Act, 2006. These
laws state that if a company is in debt of £750 or more, then the creditors of company
may apply to court for winding up of company. However, for such application, the
creditors must serve at least 21 days statutory notice to company for payment of debts.
If the company fails to pay debts even after expiry of 21 days, then the creditors may
apply to court for winding up of company (The Insolvency Service, 2015). The winding
up of company can be done in two ways, namely, compulsory winding up and voluntary
winding up.
Suggestions to Company: The company must decide as soon as the notice is served
about the payment of debts. The company may either pay off the debts or may enter
into Company Voluntary Agreement (CVA) or Creditors Voluntary Liquidation
(CVL) Agreement for winding up of company with creditors (Paterson, 2015). The
company may also if taken to the court, prove that no such debt is due from creditors.
Case 2
Facts of the case: Mr. Anderson is CFO of Amber Ltd who gave a notice to company
for resignation. As per his employment contract, if either party intends to terminate the
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contract, then it must give twelve months-notice, but Mr. Anderson gave a lesser notice
for termination.
Question Involved: The company wants to sue Mr. Anderson and wants to know if
there are possibilities of getting an injunction against him.
Applicable Laws: Amber Ltd. is a company operating in UK and therefore
Employment Rights Act, 1996, Basic Conditions of Employment Act (BCEA) and
Contracts (Applicable Law) Act, 1990 are the applicable laws on the company for
matters relating to employment and breach of contracts (Mckenzie, 2015). These laws
provide the rights to both the parties to contract to be served a notice if either party
intends to terminate the contract. The rules relating to service of notice are as follows:
Employment Duration Notice Period
More than one month but less than 2
years
At least one week.
More than 2 years but less than 12 years At least one week notice for each year
employee has been employed.
More than 12 years At least 12 weeks
However, the laws also state that where the employment contract provides for period
more than statutory period, then the contract shall supersede (Ndzi, 2017).
Suggestions to company:
Since the notice served by Mr. Anderson is not for the period required by the contract
of employment, he has committed a breach of contract and therefore the company can
sue him in court for grant of injunction as the case is in favour of company. The
company may also consider resolving the matter through Alternate Dispute
Resolution (ADR) methods.
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P5 Provide justifications for the use of appropriate legal solutions.
Case 1
Entering into an agreement with creditors for voluntary winding up can help Champion
Ltd. in saving itself from in detail scrutiny by court and therefore further legal penalties
could be avoided. The company shall also be able to appoint a liquidator and can
exercise control on operations of company in winding up procedures and the directors
shall be able to gain better price for the assets of company. The directors shall also be
able to influence the decisions of liquidators and shall be able to settle the matter with
creditors with peace and by avoiding court processes (Paterson, 2015). The balance
funds from sale of assets can also be used by the company and directors for
deployment in any new prospective business or buying back the assets.
Case 2
In a decided case of SA Music Rights Organisation v Mphatsoe [2009], it was held
that an employer has a right of notice for period established under contract of
employment and notice served for any lesser period shall be breach of contract. It also
established that the employee must serve during the notice period otherwise, it shall be
considered a breach of contract (Jackson, 2016). The facts of case of Amber Ltd. are
similar to this decided case and therefore Mr. Anderson can be dragged to the court for
breach of contract and the court may grant an injunction against him.
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M3 Assess the positive and negative impacts of legal solutions to business
problems.
Case 1
Positive Impacts: The directors of company shall have more say in voluntary winding
up process as compared to compulsory winding up process. The directors of company
after payment of debts of banks and creditors may utilize the money for any new
venture. The directors may also be able to influence the functions of liquidator relating
to the price at which assets are sold and to whom the assets are sold (The Insolvency
Service, 2015). The stress of bankruptcy process and appearances in court could also
be avoided.
Negative Impacts: The conduct of directors shall be investigated by liquidator and if
any wrong trading’s are found, then the directors may be prosecuted. The liquidator
may charge higher price for the process. The personal guarantees on overdraft and
loans by directors could also be enforced during the process. The employees of the
company shall be made redundant and other people associated with company shall
face losses (Paterson, 2015). The commercial trading of company shall come to an end.
Case 2
Positive Impacts: As a result of suit against Mr. Anderson, the employees of company
shall learn about the consequences that they may have to face in case of breach of
contract. The company shall be able to claim damages for breach of contract from Mr.
Anderson. Injunction can be granted to company against Mr. Anderson as he was CFO
of company and therefore his sudden resignation may cause losses to the company.
Negative Impacts: The company may have to prove the validity of term of twelve
months-notice in contract of employment. If the company fails to prove such validity,
then it may lose case in court of law. Such failure can result in loss of goodwill and other
employees (Mckenzie, 2015). Mr. Anderson may also leak the highly confidential
information of company to other competitors or court as he has access to such
information.
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L04 Recommend appropriate legal solutions based upon alternative legal advice
provided.
P6 Recommend solutions based on a country’s legal system and /or a different
framework.
Amber Ltd. can sue Mr. Anderson in court of law, but their dispute can also be resolved
through Alternate Dispute Resolution (ADR) methods. Arbitration, mediation,
conciliation and negotiation are four methods under ADR through which dispute can be
resolved (Clemmer, 2018). These four methods help the parties to resolve the dispute
outside courts and in comparatively less cost and in less time.
Arbitration is first method of ADR and is most common method as the decision of
arbitrator under this method is binding on both the parties. The parties may however if
not satisfied with the decision may appeal in court of law. Arbitrator appointed shall hear
both the parties and decide the matter based on facts and circumstances (Jackson,
2016). Conciliation is another method of ADR where the dispute is resolved by giving
suggestions of alternate solutions available to their problems. Such suggestions are
given by an independent person appointed called conciliator whose main aim is to bring
parties to a settlement. Mediation is third method under ADR for dispute resolution.
Under this method, dispute is resolved through making the communication process
between the parties effective. Mediator appointed under this method does not actively
participate in proceedings but help parties in communicating with each other and arrive
at a settlement (McKenzie, 2015). The last method under ADR is Negotiation where
the parties attempt to negotiate with each other to arrive at a mutually agreed settlement
with help of an independent person called negotiator. Under all these methods, dispute
is resolved independently of courts and therefore the matter remains confidential.
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M4 Compare and contrast the effectiveness of these solutions.
The dispute between Mr. Anderson and Amber Ltd. for breach of contract terms can be
resolved through traditional court process or ADR methods. Both of these methods
have their own upside and downside.
Court process is expensive and time taking but the decisions of court are legally binding
on both parties which must be compulsorily complied with. Under ADR, the process is
less expensive and less costly, but the decision or settlement is not always binding on
parties. The matter under court process does not remain confidential but the
confidentiality of matter under ADR sustains (Jackson, 2016).
Therefore, based on desired outcomes, Amber Ltd. may choose any method for dispute
resolution.
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D2 Critically review and evaluate the use of appropriate legal solutions in
alternative advice.
The method of resolving the dispute through ADR put the parties in control by
suggesting them appropriate legal solutions and giving the opportunities to resolve or
negotiate. The process is also flexible and creative, and the parties may not have to
face heavy penalties as the outcome. ADR method of dispute resolution give more
access to justice as not all people can afford going to the court for resolution of their
disputes. This process saves a lot of time, money and energy and focusses on issue
instead of legal rights and obligations and also keeps the matter confidential (Clemmer,
2018).
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Conclusion
Through the study of this report, it is clear that Parliament is the supreme law-making
authority in UK. The laws created by Parliament can override case laws, however, vice-
versa is not true. Business organizations must comply with all the laws applicable
whether enacted by legislation or common laws or laws from any other source. Such
compliance shall help the businesses grow by grabbing the opportunities available. This
shall also help the businesses in taking advantage of benefits the laws offer. In this
report, suggestions have been given to Amber Ltd. and Champion Ltd. for their
business problems. They must consider those suggestions to avoid any legal
consequences.
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