The pandemic crisis of Covid-19 has brought legal professionals on their toes to assess the risk and guide business houses to be in damage control mode.
The assessment would revolve around pre-Covid-19, during Covid-19 and post Covid-19 stages since the implications if not anticipated correctly can bring unforeseen liabilities.
The broader concept of pandemic legal intelligence for any business require a holistic view for employees, customers, Government compliances, liabilities, settlements,declarations, finance, obligations, etc.
In order to understand the best practices under pandemic legal intelligence , the major heads can be understood as under;
The first impact is on contractual obligations whether as a supplier or consumer of services. It is time to revisit the wordings and expressions deployed in force majeure clause and also to refer all clauses which results into penalty and damages for non performance so that the liability can be assessed and corrective measures can be taken.
The Force majeure in the contract needs to be understood with the events leading to it and suitable actions should be initiated to invoke or defend in the suitable manner. To understand the force majeure in India, clickhere.
The timing of invoking actions and safeguarding interests with the inbuilt clauses requires a perfect pandemic legal intelligence. There are various smart areas which can be worked upon and a strategy can be deployed to contain various liabilities.
The biggest challenge which the companies are facing during the pandemic era and especially when country wide lockouts have been declared is contractual obligations to get employees deliver or financial obligation of the employer.
The contractual workmen further add woes to this in as much as such workers at factory level are in thousands or lakhs for companies having operations at different plants in India.
The white collar employees have to be further instructed with a new drawn module for working from home with restriction and policies of reporting to their employer as well.
The social media conduct policy is another areas where the employers are worried since the employers have no control on the net usage at the residence of the employers. On 27th March,2020., an employee of a global IT company fired their employee due to restrictive postings on social media.We have had advised our clients for social media policies in lieu of directive of the Government to not to spread rumors of covid-19.
It is also incumbent upon the employer to take care of its employees during such time especially when employees are working from home. Proper guidelines should be in place for reporting any disease and particularly about corona if any one suffer from the same.
It is also a social responsibilities of employers to guide their employees so that their employees also does not spread such disease in community at large. Ensuring medical policies of employees are in operation is also a concern where companies should work and HR department should play a pivotal role.
Regulatory Watch & Compliances
It is imperative upon the in-house counsels and lawyers to keep watch over the developments and declarations made by various regulatory bodies so that an informed decision and review can be carried out by senior management, corporate affairs, legal, risk management, and to implement various functions.
Even though the compliances have been deferred by way of relaxations and reliefs by various Government agencies but still it is advisable that to the extent possible keep a close track of compliances and internally it should be worked upon so that such deferment does not result into failure of accountability since it should be always kept in the mind that employees are working from home and hence many documents may not be in place or to be traced at such time.
Keep a dedicated team to work on this, on regular basis, so that communication and internal process are in place to tackle such issues on any single day.
The day to day directive of regulatory bodies should be screened on daily basis.The deferment, relaxations and reliefs as extended in direct and indirect tax can be referred by clicking here.
It is equally significant for every company to assess their claims and losses arising during the Covid-19 phase. This has to be meticulously assessed as various claims and loses can be unforeseen so a meticulous approach be adopted so that the requirement is not only strictly complied with but also timely so that the interest of the company is safeguarded.
The policy should be closely revisited with respect to its specific terms, conditions and provisions in its entirety.
The implications with respect to import and export orders should be also incorporate while assessing the claims and loses at any given point of time.
The damage control is the most crucial and integral part of the Pandemic Legal intelligence. Sometimes, a simple communication on e-mail can save unforeseen liabilities.
When things are uncertain like as prevailing during Covid-19, it is advisable to communicate on regular basis wherever any untoward incidence seems to be occurring or may trigger.
We have had experienced over the years where a mail communication has done wonder including a dispute where prevented a sure short damage claim getting substantiated in an international arbitration.
In other words, the simplest tool for damage control is simple communication and choose your words very carefully.
We anticipate that the post pandemic Covid-19 could also bring a pandemic litigation as the business cycles of every industry has been badly hit.
The commitment of performance, delivery, payment, service, etc have drastically failed due to Covid-19 especially when entire India was under a lockout.
The term loan and working capital loans can have complications even though a relaxation in EMI’s have been declared by Reserve Bank of India, but the stock statement and irregularity as on 31st march,2020 should not be taken lightly.It can have a big impact on the liquidity of the company.
The details of relaxations by Reserve Bank of India can be referred by clicking here.
The anticipated disputes will be related to contracts, employment, contractors, suppliers, insurance, regulatory, products liability,white collar, securities law, intellectual property, commercial contracts, commercial suits, arbitrations,competition laws, tax liabilities, etc.
The recent changes as announced for moratorium under Insolvency and Bankruptcy Code and enhancement of threshold of amount from Rs One Lakh to Rs One Crore, under Section 4 of the Code, will have to be revisited as the fate of many application pending admission of CIRP before NCLT can be effected subject to the wording of awaited notification. The details of changes proposed under the Code can be referred by clicking here.
Hence, we advise to ensure that all aspects are verified on regular basis and all major departments like legal, finance, Supply chain management, marketing, etc., should start working closely as a part of implementation of pandemic litigation intelligence to avert unforeseen liabilities which may crop up with Covid-19 litigation in India.
This write up is an academic piece by Anandaday Misshra, Founder & Managing Partner, AMLEGALS
To understand as to how the pandemic legal intelligence can work for your business to minimize risk, business disruption and disputes and prevent unforeseen liabilities at pre, during and post Covid-19 stages, feel free to connect with us on firstname.lastname@example.org.
Our two white papers exhaustively covering on pandemic legal intelligence can be obtained by sending mail on email@example.com from your official email id.
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