Legal System and Solutions in the UK: A Comprehensive Overview

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The legal system and solutions
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Executive summary
The assignment studies the various provisions present within the legal system in the
UK, and delves into the various aspects of statutory and common law systems within
the judiciary. The laws relating to businesses and organizations have also been
described in a detailed manner along with a variety of methods for alternative dispute
resolution and sources of legal advice that are typically present within the UK.
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Table of Contents
Introduction...................................................................................................................... 3
LO1 Explain the nature of the legal system......................................................................3
Different sources of law....................................................................................................3
Application of statutory and common law in the UK courts..............................................3
LO2 Illustrate the potential impact of the law on a business............................................5
Impact of law on business................................................................................................5
Effectiveness of recent reforms and developments.........................................................5
Differences between legislation, regulations and standards............................................6
LO3 Examine the formation of different types of business organisations.........................7
Formation of different types of business organisations....................................................7
Management and funding of business organizations.......................................................8
Advantages and disadvantages of different types of business organizations..................8
LO4 Recommend appropriate legal solutions to resolve areas of dispute.....................10
Alternative dispute resolution methods..........................................................................10
Different sources of legal advice....................................................................................10
Conclusion..................................................................................................................... 11
References.....................................................................................................................12
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Introduction
The legal system within the UK is fundamentally based on the principles of the common
law system, and is one of the oldest statutory systems across the world. The
classifications within the common law system can be broadly categorized into two
specific segments, which are civil law and criminal law. British law further
accommodates a law for torts, but it is generally categorized under civil offences across
courts. The highest court of law within the UK is the Supreme Court, under which a
variety of senior courts and subordinate courts function as courts of first appeals.
LO1 Explain the nature of the legal system
Different sources of law
The legal system within the UK can be fundamentally divided into primary and
secondary sources of law, whereby the primary sources include the legislations and
precedents and secondary sources include legal opinions, anecdotes, arguments and
so on (Gill, 2018).
Common laws and statutes: The common law system within the UK is fundamentally
a collective accumulation of judicial decisions and judgements based on constitutional
belief systems and thought processes of jurists over time. These passed judgements
largely function as precedents and are extensively referred to in new cases to speed up
the delivery system.
Civil law: The concept of civil law is the integration of a multitude of statutes and
regulations that do not entail any degree of criminality and fundamentally address
queries and grievances that are inherently civil by nature. Law of torts, company and
commercial law, revenue law and so on are some of the most important facets within
the concept of civil law (Williams and Walters, 2016).
Common law and equity: Common law and equity is fundamentally a decree system
where the courts of law enforce a certain action or pass preventive orders to obstruct an
action that is taking place or could take place in the future. The equity system is typically
supervised by the Chancellor of the territory the plead takes place in and is based on
the country.
Parliamentary conventions: Parliamentary conventions are another important part
within the common law system of the UK, and are enforced rigorously owing to their
unanimous nature. These conventions are essentially procedural arrangements that
safeguard a host of rights and regulate how certain bodies and agencies could behave.
Application of statutory and common law in the UK courts
The legal system within the UK has seen the application of statutory and common law
encompassing a variety of aspects over time, and some landmark judgements have
been passed as well that has broadly shaped the way the system works even today
(Karran and Mallinson, 2017).
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In the context of the application of statutory law, the case of De Keyser’s Royal Hotel is
one of the primary cases that paved the way for the application of pre-war statutes in
modern times. In Attorney General v De Keyser’s Royal Hotel Limited (1920), several
Officers of the Crown had entered the premises during World War I, and stated to the
owners that they were acting constitutionally and had special powers owing to the
situation under the Defence of the Realm Act, 1914 (Dougan, 2017). The owners
however argued for compensation as mentioned in the Defence Act, 1842. The
judgement initially went towards the Crown, but was later reversed and the owners were
paid compensation and several guidelines were also established regulation the use of
power under prerogatives of the crown (Melissaris, 2016).
The application of the common law can be witnessed in the historic case of Donoghue v
Stevenson (1932), a landmark judgement that established the various principles of
negligence. The facts of the case were that a snail was discovered inside a bottle of
beer, and Donoghue was subsequently diagnosed with a case of gastroenteritis. The
courts passed a judgement favouring Donoghue and entitled him to receive damages as
well as a reimbursement for any expenses incurred for treatment and rehabilitation
(Nelken, 2017).
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LO2 Illustrate the potential impact of the law on a business
Impact of law on business
Business organizations are typically governed by a variety of laws and regulations
relating to contracts, employment, company policies, competition and so on.
Employment Law: Laws relating to employment fundamentally safeguard the rights of
employees and address grievances that arise out of disagreements within workplaces.
The primary statutes under employment law include the Employment Rights Act, 1996
and the Pensions Act, 2008 (Keay et al., 2019).
Contract Law: Laws relating to contracts ensure that the agreements made between
parties are regulated and enforced in a constitutional manner and the degree of
ambiguity is largely diminished. The primary statue in this regard is the contract Act,
1999.
Company Law: Laws relating to company policies and decisions primarily take place
under the Companies Act, 2006 and exercises corporate governance to a large extent.
The multiple rights, duties, obligations and so on of the companies as well as the
involved individuals are described in a structured manner in order to prevent any
discrepancies regarding the same.
Competition Law: Laws relating to competition is primarily regulated by The
Competition Act, 1998 and The Enterprise Act, 2002. The laws fundamentally prevent
unhealthy competition and enforce free trade to a large degree. UK was victim to a host
of monopolies in the early 1700’s and the 1800’s, and the laws came about in order to
prevent the repeat in order to grow and develop the economy.
Effectiveness of recent reforms and developments
The British legal system in the recent times has undergone a variety of changes and
amendments in order to ensure that the judiciary becomes progressively robust and
reduces the degree of ambiguity and cloudiness involved. The changes took place in
two places, one being under the Blair government and the second being the Cameron
government. The primary change that took place was the creation of the ministry of
justice that replaced the Department for constitutional Affairs, and this largely clubbed
various governmental bodies and agencies under one department with the objective of
increasing coordination and streamlining the entire process. Another important change
that took place was the creation of the Legal Services Commission, a landmark
amendment that enabled the speedy delivery of information and justice to the poor and
the underprivileged (Norris, 2016). The Tribunals Service and the Judicial Appointments
Commission was also created and it further streamlined the various processes within
the judiciary to a large degree. The introduction of the private sector within the
governmental services was another major step, as private prisons were implemented
and the first private facility came about in the year of 1992. Probation services were also
privatized as a development to the same and this largely reduced the burden on the
government as the number of prisoners was growing within the UK. The Cameron
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government also saw a number of developments that came about, with the most
important being the initiation of the College of Policing, National Crime Agency,
reforming the county court, establishment of the Family court and so on.
The effectiveness of these various reforms was extensive and widespread to a large
degree, and brought a general sense of commitment to provision of justice in a timely
manner and ensuring customer service. The information and communication
technologies involved within the processes was also revamped significantly, and
modern solutions were implemented in order to streamline the process, reduce any
existent barriers and develop highly effective and strategic channels of communications
within the judiciary. The changes also saw the implementation of highly specialized
courts, and this would further bolster the judiciary with the objective of targeting
problems in a segmented manner. The concepts of alternate resolution methods and
creating new avenues for the adequate funding of justice was another important
resultant outcome of these changes, and this brought about a sense of equity within the
legal systems and made courts and the judiciary accessible to every individuals
irrespective of their social status of the amount of wealth they had been able to
accumulate.
Differences between legislation, regulations and standards
The laws within the UK can be broken down into primarily legislations, regulations and
standards. Legislations refer to statues that have been enacted by an authorized body
or an agency within the UK, while regulations, as opposed to legislations, are mere
guidelines and directive statements that are generally issued by the government in
general or a specific ministry with the sole objective of ensuring a certain line of action
or preventing a negative or potentially obstructive action that could cause damage to an
individual or an institution. Standards are fundamentally different from legislations and
regulations and typically apply to the whole of EU owing to the inclusion of the UK within
the EU. These standards are essentially widely acknowledged documents that enforce
certain characteristics to products and services in order to uphold a certain quality
below which the products or services would be deemed to be of an inferior quality.
Standards are typically issued by authorized bodies of standardization and do not entail
a compulsory mandate of compliance (Emerson, 2015).
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LO3 Examine the formation of different types of business organisations
Formation of different types of business organisations
Business enterprises have a variety of choices when it comes to setting up the structure
of the organization in accordance to the legal provisions and regulations within the UK.
The classifications can be broadly categorized into incorporated and unincorporated,
whereby incorporated refers to companies that are registered with the authorize
Registrar of companies and bear a separate identity distinctly apart from the owners.
Unincorporated enterprises are typically sole proprietorships and unregistered
partnerships, and the owner or the proprietor bears the brunt of the entire liability in
these cases.
These classifications can be further divided based on certain specifications, and they
have been discussed below and are as follows.
Public Limited Company: Public limited companies are business enterprises that are
listed on public stock exchanges and are authorized to engage in the free trading of
their shares, stocks and debentures with the objective of growing their accumulated
capital. The laws within the UK require public limited companies to have at least
£50,000 as the minimum share capital and further need one fourth of it to be paid up
front. Two directors are also mandatory requirements along with a company secretary in
the case of public limited companies (Tushnet, 2017).
Private Company Limited by Guarantee: Private companies that are limited by a pre-
determined guarantee agree upon a definite amount that is enforced upon the warrantor
and must be paid at the time of liquidation or winding up. The guarantee limitation
model is primarily used by voluntary and charitable organizations like trade unions,
worker unions, charities, community groups, societal and cultural collectives and so on.
Private Company Limited by Shares: Private companies that are limited by the
number of shares are the most common form of business enterprise both within the UK
as well as across the world. Companies that are limited by shares are typically called
private limited companies and a key factor that drives their popularity is that the owners
or the director’s assets are beyond the operatives of the company and cannot be
touched during winding up or liquidation irrespective of the situation (Adams, 2016).
Private Unlimited Company: Private companies that operate through unlimited liability
are the most risky among the various forms, and the personal assets of the owners and
the directors are attached almost ubiquitously. However, certain organizations prefer
this type owing to the level of secrecy that the regulations provide, especially regarding
the financial standpoint and the non-requirement for regular audits. Moreover, the
companies that operate through unlimited liability do not need to authorize their yearly
financial report through the Companies House and this allows a certain business
advantage over other companies that need to undergo regular audits and financial
supervision (Cleaveland et al., 2015).
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Management and funding of business organizations
The management and funding can be done within business organizations through a
variety of measures, and some measures are used more widely when compared to
others. Crowd funding is one of the most popular measures that individuals rely upon in
order to set up a business and initiate the operations. Oculus was one of the major
companies that used this method while manufacturing virtual reality headsets, and is
valued well over million dollars currently. Crowd funding requires individuals to post their
ideas on platforms and online websites, and if the users like the idea, they make
voluntary donations that help the company to set up their operations. Crowd funding is
extremely popular in today’s times, and owing to the success of Oculus, a host of
companies and organizations have cropped up in order to set up and scale their
operations (Morley, 2016).
Venture funding is also another tried and tested method, whereby the owner or the
owners of the business pitch the idea to a series of angel investors and financial
services organizations in order to accumulate capital and get them to invest in the
company. Venture funding is possible the most commonly used form of setting up and
scaling business operations, and Alibaba is possible the largest example of the strength
of the concept. Jack Ma started his business with his friends, and eventually resorted to
venture capital in order to grow the reach. The money taken was paid off within three
years of initiation, and today Alibaba is the largest supply chain organization in the world
with operations in over 120+ countries.
Private equity is another form of approach that organizations can undertake, but this
requires a certain degree of dedication on the part of the owners. The prime example of
the success of private funds and equity is the company of Amazon that Jeff Bezos
started way back in the 1990’s with his savings after he quit his job at Wall Street.
Amazon went on to become the most dominant tech company in the world and serves
over a million customers daily with operations in almost every country possible.
The management also differ significantly within organizations, and can be broadly
categorized into three distinct classifications of functional, projectized and matrix.
Functional management essentially relates to the grouping of teams and individuals
based on the specialization area, and are the most commonly form of management
policy used by organizations across the world. Projectized management is when the
company undertakes a management policy based on the projects that the company has
currently and will undertake in the future (Rohlin and Ross, 2016). This allows for a
highly streamlined process of operations and ensures a general sense of direction
within the individuals involved. Matrix management policies make use of both functional
and projectized approaches, and form a network within the organization that is headed
by both the functional as well as the project managers. This allows for the integration of
different perspectives and enables companies to paint a clear picture of the various
organizational requirements (Howells, 2017).
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Advantages and disadvantages of different types of business organizations
Sole proprietorships and partnerships provide a certain advantage that the owner
maintains full control over the operational decisions of the company and can run the
business in the manner he deems the most appropriate. However, the liability is
immensely high and can be extremely dangerous, especially if the business fails to
establish itself and needs liquidation (Vasilyeva, 2019). Moreover, unincorporated forms
of ventures allow for a high degree of interpersonal relationship between the
management, employees and the customers owing to the small scale of operations and
limited number of employees, and this can benefit the organization in the long term in
establishing a relatively strong footing within the industry.
Incorporated forms of businesses, however, are the most common, and this is largely
due to the limited liability involved and the fact that the shareholders and guarantors can
be absorbed by the organization if required. Tax regulations are also relatively relaxed,
and owing to the different avenues of funding, these businesses typically have a larger
accumulated capital and more comprehensive sets of skills and competencies within
their employees. Certain disadvantages also exist, with the primary being the costs
required to maintain the operations due to the increased number of formalities and the
number of tax compliances. Audits are also required in some cases, and personal
assets may be attached as well in the case of unlimited companies. Moreover, the
profits are only distributed after a tax deduction, which could prove to increase the
operational expenses further in the future (McCormack, 2017).
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LO4 Recommend appropriate legal solutions to resolve areas of dispute
Alternative dispute resolution methods
Alternative dispute resolution methods are essentially an effort to ensure a speedy
delivery of justice beyond the courts of law, especially in matters that can be solved
without judicial intervention. In the context of the UK, alternate dispute resolution takes
place primarily through three methods that include mediation, executive tribunals and
early neutral evaluations.
Mediation refers to the resolution by mediators, who are individuals that all the parties
involved in a contract agree upon during the formation of the contract or the agreement.
These individual usually tend to be highly reputed persons within the society, and a
majority of them belong from within the judiciary itself (Hansmann and Kraakman,
2017).
Executive tribunals are fundamentally quasi-judicial bodies that act as fast track courts
and report to the Ministry of Justice. They undertake hearings regarding a variety of
aspects including political asylum, immigration, social security, marriage and alliance
and so on, and are an excellent measure to resolve disputes while eliminating the time
and money required engaging a proper court of law for the same.
Early neutral evaluations are a lot like mediation, but the parties involved provide their
arguments in a secretive manner without the presence of each other. This allows for
limited scopes for disagreements, and the evaluator can accurately study and analyze
the situation and provide a judgement following the evaluation. Most agreements and
contracts within the UK have an ENE clause that allows for such resolution, and this is
also another excellent approach to resolve disputes in a speedy manner.
Different sources of legal advice
Legal advice within the UK can be obtained from a variety of sources, some of which
are as follows.
 Citizens Advice are localized charities that ensure free legal advisory services to all
the classes of society.
 Law centres are also prevalent within the UK and are also privately run voluntary
associations
 Legal Aid is the most prevalent organization within the UK in matters of the judiciary,
and has helped a number of individuals over the years.
 Pro bono services are also taken up by a number of solicitors and advocates and
essentially provide an individualized advisory service to the client based on specific
requirements.
 The government also has local author advice services, and they help individuals that
struggle with problems related to the judiciary.
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 Online websites have also been developed both by private individuals and
governmental agencies and provide free legal advice to citizens on a variety of
matters like pensions, housing policies and so on.
Conclusion
In conclusion, it can be stated that the judiciary within the UK has come a long way
since the pre war era and is one of the most robust and developed systems present
today across the world. The legal systems covers almost every aspect of societal life,
and the regulations are all the more pronounced in the case of businesses and the
various factors associated with businesses like employment, contracts and so on.
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