Legal implications of COVID-19 – Selborne Chambers Bulletin – Issue 3

06.04.2020

We are witnessing enormous changes in the way the Court system delivers justice. In a recent seminar (delivered remotely) Mr Justice Nugee said that “it is business as usual, but not in the usual way”. The rapid and widespread adoption of remote conferencing technology over the past three weeks will almost certainly alter the litigation landscape in lasting and fundamental ways.

To help you navigate these momentous times, Selborne Chambers is producing a weekly bulletin on the legal implications (both substantive and procedural) of the coronavirus epidemic. In this edition:

  • Chris de Beneducci looks at the latest guidance on procedure in the High Court and County Court, with specific reference to the evolving practice of the Interim Applications Court;
  • Tom Frazer discusses Practice Direction 51ZA (which contains very important provisions regarding extensions of time), Practice Direction 51Z (which imposes a blanket stay on all possession proceedings), and s.82 of the Coronavirus Act 2020 (which affects the forfeiture of commercial premises); and
  • Oberon Kwok explores the electronic execution of documents, one of the hottest issues of substantive law in the commercial chancery world at present.

 

Should you wish to discuss any of these topics, or raise any other queries, do not hesitate to contact either the clerking team (+44 (0)20 7420 9500 or clerks@selbornechambers.co.uk) or any member of Chambers. Please rest assured that we remain fully operational and are very much open for business.

 

Latest Guidance on Court Procedure

  1. As at the date of this Bulletin, the two core documents in respect of Court procedure are:1.1 “High Court Business – Contingency Plan for Maintaining Urgent Court Hearings” (dated 26 March 2020): Accessible here; and1.2 “Civil Justice in England & Wales – Protocol Regarding Remote Hearings” (second edition 26 March 2020; first edition 20 March 2020): Accessible here.

 

  1. The key points which emerge from those documents are as follows:2.1 Work in the High Court is being divided into “urgent business” (i.e., “business that would warrant an out of hours application”) and “business as usual” (i.e., everything else).2.2 “Urgent business” is being prioritised, although “business as usual” will continue to be dealt with to the extent possible in light of the resources available.2.3 If (and only if) a matter qualifies as urgent business, the party may apply to Court by emailing the relevant listing office and liaising with the duty listing officer. Arrangements will then be made for the hearing of the application.2.4 Whilst a number of “priority Courts” do remain open, as many hearings as possible are to be undertaken remotely (in both the High Court and the County Court).2.5 The default position is that remote hearings should still be public hearings, i.e. hearings to which the public has access. That is primarily to be achieved by making provision for media representatives to join the conference call: hence the now-standard rubric on the Rolls Building Cause List, in accordance with Practice Directions 51Y and 51ZA, that “if a representative of the media wishes to attend a Skype hearing they should contact the listing office [by email] who will put them in touch with the relevant person”.

 

  1. It must be assumed that, once Hilary Term ends on 8 April 2020, similar arrangements will be maintained during the Easter vacation and into Easter term (which starts on 21 April 2020).

 

  1. In addition, HMCTS is currently publishing an extremely useful “Operational Summary”, updated daily (accessible here). The Operational Summary sets out the latest position across all jurisdictions, including the “Civil Court listing priorities”. This document clarifies, in respect of the County Court only, “work that must be done” (Priority 1) and “work that could be done” (Priority 2). Parties should expect matters to be listed for hearing – or, rather, not listed for hearing – accordingly.

 

  1. Supplementing the above resources, on 31 March 2020 Nugee J. delivered a talk to the Chancery Bar Association (via Zoom) discussing the arrangements in the Interim Applications Court. Familiarity with the practice of that Court is particularly important for advising clients on their options in what certainly remains a fast-moving economic and public health climate.

 

  1. Nugee J. stressed the importance of contacting the relevant Judge’s clerk as soon as possible to make arrangements. That recommendation is now incorporated in the rubric on the Rolls Building Cause List, which for 6 April 2020 reads as follows: “Please note that while the Interim Applications Court will continue to sit during the current pandemic, parties are being encouraged to arrange remote hearings with the judge using Skype for Business or by telephone wherever possible.  Parties intending to apply should contact the clerk to Mr Justice Snowden at susan.woolley@justice.gov.uk as early as possible to make arrangements”.

 

  1. Practically speaking, Nugee J. warned against relying simply on uploading documents to CE-File; an indexed PDF bundle will typically be of much greater assistance (if the Judge does not want hard-copy bundles couriered to his or her home). Another difficulty is handing up documents during the hearing itself; thought needs to be given, in advance, to how this might best be done.

 

  1. Put simply, the attitude of the senior judiciary is that the show must go on. This was a point emphasised by Nugee J., who cautioned strongly against assuming that adjournments will be granted as a matter of course. By way of example, in the Business & Property Courts on 6 April 2020, Nugee J. and Cockerill J. are hearing trials remotely via Skype and Zacaroli J. is hearing a committal application remotely via Skype. That limited selection of the matters being dealt with should give a sense of the degree to which (in the Rolls Building at least) there is both the desire and the ability to keep civil litigation on track.

  

Extensions of Time (PD 51ZA)

On 2 April 2020, PD 51ZA was introduced with immediate effect, the impact of which is as follows:

  • Where a rule, practice direction or court order requires a party to do something within a specified time, the parties may agree an extension of that time limit. PD 51ZA Paragraph 2 provides for an extension to the maximum time that may be agreed, from 28 days to 56 days.
  • Paragraph 3 provides that any extension of time beyond 56 days (either by agreement or on application to the court) requires the permission of the court. An application for such permission will be considered by the court on the papers. Any order made on the papers must, on application, be reconsidered at a hearing.
  • Paragraph 4 is intended to give guidance to the court when considering applications for extensions of time and adjournments. It provides that, in so far as compatible with the proper administration of justice, the impact of Coronavirus is a factor to be taken into account when considering:i. applications for the extension of time for compliance with directions;
    ii. the adjournment of hearings;
    iii. and applications for relief from sanctions.
  • Paragraph 5 amends Practice Direction 51Y, which concerns video recording of hearings under s.32 of the Crime and Courts Act 2013 or s.85A of the Courts Act 2003. Pursuant to PD51ZA, access to such a recording in a court building, with the consent of the court, is upon ‘request’ rather than upon an ‘application’.

 

Possession Proceedings (PD 51Z and s.82 Coronavirus Act 2020)

In addition to PD 51ZA, which is of general effect, this bulletin also looks at some of the practical consequences of two measures put in place specifically impacting possession proceedings, Practice Direction 51Z and section 82 of the Coronavirus Act 2020.

 

Practice Direction 51Z

    • The scope of PD 51Z is wide-ranging: it applies to all possession proceedings brought under CPR Part 55 and all proceedings seeking to enforce a possession order. All such claims are stayed until 25 June 2020. These include:

i. Claims for possession, be it residential or commercial, brought by:

        • A landlord;
        • A mortgagee, relating to mortgages and charges both legal and equitable;
        • A licensor.

ii. Claims for possession brought against trespassers

iii. Accelerated possession claims of property let on assured shorthold tenancies

iv. Claims for interim possession orders

  • PD 51Z is intended to apply to relevant possession proceedings that have already been commenced. Existing possession claims will therefore be subject to the 90-day stay. It does not appear that parties need take further action to trigger the stay, such as obtaining an order, as this is done by the PD itself.
  • PD 51Z does not prevent parties bringing claims for possession under CPR Part 55. Claims can therefore still be issued following 27 March 2020, however they will be subject to the stay, consequently not progressing, until 25 June 2020.

 

Section 82 of the Coronavirus Act

Following the enactment of the Coronavirus Act 2020, Paul De La Piquerie has provided the following commentary on the impact of s.82 on commercial landlord and tenant proceedings, as well as some practical advice for those likely to be affected.

The effect of section 82

  • Under s.82(1), landlords of commercial premises cannot forfeit a lease for non-payment of rent, by peaceable re-entry or action, for the relevant period (which currently runs until 30 June 2020, but is capable of extension). It should be noted that s.82(1) does not affect a landlord’s right to re-enter upon grounds other than non-payment of rent. As the stay in PD 51Z does not affect a landlord’s right to forfeit by peaceable re-entry, they may continue to do so on grounds other than non-payment of rent.
  • ‘Rent’ for the purposes of this Act is defined by s.82(12) as ‘any sum a tenant is liable to pay under a relevant business tenancy’. This is a broad definition and may encompass payments that would not ordinarily be considered as rent.
  • Pursuant to s.82(2), no conduct of the landlord will waive a right of re-entry for non-payment of rent, save giving an express waiver in writing.
  • 82(4) prevents the court making an order requiring a tenant to give the landlord possession for non-payment of rent on a date prior to the end of the relevant period. Where such an order has already been made by the County Court, the date is to be treated as extended to expire at the end of the relevant period. Where such an order has already been made by the High Court, the tenant may apply to vary it. Pursuant to s.82(6), the High Court must ensure, when dealing with any such application, that the tenant is not required to leave the premises before the end of the relevant period.
  • As a result of s.82(11), the Court must disregard a failure to pay rent during the relevant period when assessing whether a tenant has persistently delayed in paying rent under s.30(1)(b) of the Landlord and Tenant Act 1954.

 

Practical Consequences for Commercial Landlords and Tenants

  • Parties should cooperate to understand the legal impact of coronavirus on their lease and how best to address any issues that may arise. It would be prescient for landlords and tenants, acting on legal advice, to agree a written plan (with the approval of insurance providers and financial lenders). Issues that could arise include:

i. Some commercial leases being brought to an end as a result of a force majeure clause or frustration;

ii. Breaches of tenants’ covenants as a result of closure of premises;

iii. Potential claims that either party may wish later down the line to assert against the other.

  • It is conceivable that courts will, in future, take a more lenient approach to granting relief from forfeiture to commercial tenants who have been impacted by the coronavirus outbreak. This may include:

 

i. Not requiring tenants to repay all rent arrears before relief is granted;

ii. Granting tenants a longer period in which to pay rent arrears;

iii. Having greater sympathy for tenants in administration and liquidation as a result of the downturn in business consequent to the lockdown measures.

 

Electronic Signatures

During a time of social distancing, many of our clients have enquired about the legal position of electronic signatures on documents. Here is a handy overview.

 

Can an electronic signature be a valid signature?

Generally, yes.

  • A signature is where someone attaches their name or mark which objectively shows their approval of the document (The Good Challenger [2003] EWCA Civ 1668 at [22]).
  • The name at the end of an email can be a signature to a contract, as long the sender is intended and understood to be approving the contract terms, rather than just signing off the email (Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd [2012] EWCA Civ 265).
  • So the general position is that an electronic signature can be just as valid as a physical signature, as long as it is objectively understood as a sign of approval of the document (Neoclous & anor v Rees [2019] EWHC 2462 (Ch)).

 

Could the signing of a deed be witnessed remotely?

It would be best not to.

  • The law isn’t settled on whether someone can witness the signing remotely e.g. watching the signing live through a video-link.
  • The Law Commission says that parties can’t be confident this is a valid method of witnessing a signature, and suggests that the witness must be physically present (Law Com No 386, Electronic execution of documents, Sept 2019).
  • In the current era of home working, a solution may be to have a neighbour physically witness the signing (whilst remaining at sufficient distance and complying with Government guidelines). In fact, a similar approach has been adopted by the various private client firms now offering “wills through a window” schemes.

 

What about conveyancing and the Land Registry?

The Law Society, in a recent post online, says this in relation to electronic signatures:

  • Can be used to sign contracts to sell/buy unless the contract is being executed as a deed.
  • Can’t be used for deeds.
  • Probably can’t be used where a signature needs to be witnessed unless the witness was present when the electronic signature was affixed – in which case a wet ink signature could have been used.
  • Can’t be used where a wet ink signature is required, for example, for documents for HM Land Registry and some lenders.

 

Some flexibility and creativity can, and should, be found in the current climate of social distancing and home working. If you would like some detailed advice on the electronic execution of your documents, we would be happy to help. Our contact details can be found above.

 

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