Current COVID-19 lockdown restrictions are likely to continue throughout February and many businesses affected by the restrictions will be interested in the recent Supreme Court decision concerning business interruption insurance. In-house lawyers should also keep their eye on recent developments in corporate governance and climate change.
COVID-19
The nationwide lockdown is likely to continue throughout February. The Chancellor has announced one-off top-up grants for retail, hospitality and leisure businesses, worth up to £9,000 per property, to help businesses affected by the new closures through to the spring. A £594 million discretionary fund has also been made available to support other businesses affected by the new lockdown rules. A Private Members’ Bill has been introduced requiring the government to undertake an assessment of any gaps in financial support provided to individuals, businesses and industries during the COVID-19 pandemic. The Bill has been read for the first time and is due to have its second reading on 29 January 2021.
On 15 January 2021, the Supreme Court handed down its judgment on a test case brought by the FCA seeking legal clarity on the meaning and effect of certain non-damage business interruption (BI) insurance policy wordings. The Supreme Court has substantially allowed the FCA’s appeals and dismissed the insurers’ appeals. The judgment means that many thousands of policyholders who have cover should now have their claims for COVID-19-related BI losses paid.
Swiss insurance firm Zurich has introduced “lockdown leave”, constituting two weeks of paid leave for parents facing emergency childcare issues in the face of primary and secondary school closures during the third national lockdown. Business Minister Paul Scully MP has resisted calls to provide a legal right to furlough for individuals with caring responsibilities, confirming instead that it is an employer’s decision whether to grant furlough to employees in this situation.
Women’s charity, Rights of Women, has raised concerns of an increase in online sexual harassment of women at work as platforms used by employers to facilitate remote working (such as Zoom, Teams and social media) have given harassers a new way to access their victims. The charity highlights that video calling has eroded privacy and safety by bringing harassers into their victims’ home environment, including their bedrooms. It also reports that victims have felt less able to report harassment to their employers while working remotely.
Corporate governance
ICSA has published a report following its review of the effectiveness of independent board evaluation in the UK listed sector. ICSA considers that, while there is no evidence of widespread market failure, there is scope for broader adoption of good practice and greater transparency by board reviewers and companies. The report sets out a series of recommendations and a package of proposed measures that consist of:
- A voluntary code of practice for providers of external board performance reviews to FTSE 350 companies.
- Voluntary good practice principles for listed companies.
- Guidance for listed companies when reporting on their annual board performance review.
It is intended that the package of proposed measures will develop into a market-based mechanism for raising standards and increasing accountability, without the need for regulatory intervention.
Execution of documents
The Company Law Committee of the Law Society has published a Q&A on how to use electronic signatures and complete virtual executions, which aims to assist lawyers with some of the practicalities of using an electronic signature in England and Wales. The areas addressed by the Q&A include:
- Witnessing requirements.
- The evidential weight of different types of electronic signature.
- Using electronic signatures to sign the minutes of company meetings and written resolutions.
Climate change
In December 2020, the Committee on Climate Change (CCC) published a series of reports setting out its recommendations for the UK’s sixth carbon budget. This maps the path to the UK’s 2050 net zero greenhouse gas (GHG) emissions target over the next three decades and provides a detailed assessment of the changes that will result from the recommended actions. The CCC’s recommended pathway requires a 78% reduction in UK territorial GHG emissions between 1990 and 2035. This brings forward the UK’s previous 80% target by nearly 15 years. Delivering this target will require a major investment programme of up to £50 billion each year in low carbon technologies across the UK, delivered mostly by the private sector.
ShareAction (a responsible investment NGO) has announced that it, and over 100 other investors, has filed a shareholders’ resolution on climate-related action to be put before HSBC’s Annual General Meeting later this year.
Prompt Payment Code
BEIS has announced the imposition of new requirements on signatories to the Prompt Payment Code, some of which come into effect immediately. In addition, from 1 July 2021, signatories will be required to pay 95% of invoices from small businesses (those with fewer than 50 employees) within 30 days.
Key dates for your diary
1 February 2021
- Revised ISS 2021 Proxy Voting Guidelines apply to shareholder meetings taking place on or after this date.
- HMRC to start publishing details of employers’ CJRS claims from this date.
3 February 2021
The following BEIS consultations close on this date:
- Implementing the ban on corporate directors.
- Improving the quality and value of financial information on the companies register.
- Powers of the Registrar.
5 February 2021
- FRC consultation on the future of corporate reporting closes.
- Deadline for submission of bids to establish freeports.
- Deadline for inquiry on the future of UK-EU relations on trade in services.
8 February 2021
Closing date for responses to the European Commission consultation on a possible sustainable corporate governance initiative.
10 February 2021
Deadline for feedback on the proposed Digital Markets Act.
12 February 2021
Deadline for responses to the International Trade Committee inquiry into digital trade and data.
22 February 2021
Consultation on restricting price and location promotions of HFSS products ends.
26 February 2021
Closing date for government consultations on:
- Reform of post-termination non-compete clauses in employment contracts.
- Extending the ban on exclusivity clauses in employment contracts.
