Our regular round-up of recent developments and topics for your radar, news on training and networking events for in-house counsel, and an update on our legal tech initiatives.

HIGHLIGHTS

The COVID-19 pandemic has caused unparalleled disruption to the judiciary, which has been presented with logistical hurdles as well as acute legal issues to tackle.

This article summarises some notable recent caselaw concerning the fallout from the pandemic. Broadly, the judiciary has adopted a strict but fair approach when parties have sought leniency due to the impact of COVID-19. Courts have not looked kindly on those who are seen to be unfairly capitalising on the disruption but, where merited, parties have been granted clemency.

Companies with an international footprint will need to ensure that their tax residence (and other taxable presence) is not affected by travel restrictions imposed in response to the COVID-19 pandemic. HMRC has published guidance on these issues, which is somewhat helpful if less definitive than the approach of a number of other jurisdictions. Careful thought will be needed where senior executives/management are unable to travel, and so are required to carry on their role or participate in key management or commercial decision-making in a different jurisdiction from usual.

On 25 June 2020, new legislation came into force in the UK which makes it much more difficult for suppliers to terminate contracts where the customer is subject to an insolvency procedure. In this briefing, we highlight the key issues that both suppliers and customers should be aware of and consider whether you should amend termination provisions in new contracts.

Welcome to the inaugural edition of our new newsletter, which is intended to capture the key developments in the English disputes arena over the past three months. We hope that you will find it an interesting read, whether you are a litigator, either in private practice or in-house, or a generalist wanting to keep abreast of the goings on in this space. We also hope that you will pass it on to any of your colleagues who may find it useful.

The first reading of the Corporate Insolvency and Governance Bill (the "Insolvency Bill") took place on 20 May 2020.  The Insolvency Bill will be debated by the House of Commons on 3 June 2020 and is proposed to be introduced as fast-track legislation. 

The impact of COVID-19 is being felt at all levels of the economy and will work its way through bankruptcy courts for years to come. In these early days, many creditors who are themselves suffering are providing assistance to troubled companies. Suppliers and commercial landlords are agreeing to various forms of relief, including modified credit terms and rent relief to allow customers to bridge this period of unprecedented disruption. While these corporate good Samaritans are providing immediate aid they may be subjecting themselves to the risk of future losses.

The economic fallout from the COVID-19 pandemic will leave in its wake a significant increase in commercial chapter 11 filings. Many of these cases will feature extensive litigation involving breach of contract claims, business interruption insurance disputes, and common law causes of action based on novel interpretations of long-standing legal doctrines such as force majeure.

Last week, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law, implementing broad relief for individuals and businesses affected by COVID-19. One of the sections of the CARES Act receiving less attention is a temporary amendment to the Bankruptcy Code to provide streamlined reorganization procedures for businesses with debt of less than $7.5 million.

There have been increasing concerns in recent weeks that UK insolvency law does not accommodate the short-term impact of COVID-19 on many businesses.  In response, the Business Secretary announced on 28 March that the UK's insolvency rules would be amended as part of the Government's wider business support package.  Whilst the measures that the Government intends to implement have not yet been fully detailed, this note summarises what has been announced so far and what we might expect, based on the Business Secretary's comments.