REPORT ON THE LEGAL ENVIRONMENT OF BUSINESS OPERATION IN THE UK
This report aims to investigate the legal aspects which surround the running of a business in the United Kingdom. In addition to that, it answers a series of questions pertaining to the rules and regulations that control how business operates in the region. It begins with a clear elaboration of the laws applied in the UK and their respective sources, and expounds more by giving a concise explanation regarding the courts, methods of conflict resolution as well as business ethics. All this is in preparation of a new business venture in the UK by the ‘World Tours’ travel agency. The findings are numerous, and present a complex system of frameworks set up to govern business interactions as well as the country’s legal affairs.
Sources of Law in the UK
Laws in the United Kingdom originate from a number of sources such as the common law, Equity, Legislation, constitutional conventions and customs. The most vital source is the Legislature, also known as Parliament, which is the key body involved in passing and amending laws. It consists of the House of Commons that is made up of members of parliament, and the House of Lords; comprising of a number of aristocrats and principle members of the clergy such as bishops. Legislation may either be primary or secondary and the government is responsible for initiating it. It is thereafter passed through the Legislature as General Public Acts (Marson and Ferris, 2015, pg 44).
Primary legislation involves statutes while secondary legislation is passed by ministers through powers assigned to them by Parliament, and it involves statutory instruments such as codes and regulations. Another fundamental source of law is the common law. It is passed by the courts and is founded upon previous court decisions on past cases; it is often rigid. Judgments from cases in the past are recorded over the years and are utilized as law to preside over cases in the future and make suitable judgments.
Equity goes hand in hand with the common law, but it is more flexible and offers more just remedies. In the case where the two laws are in conflict, equity always wins. Certain principles known as maxims are applied when it comes to the enforcement of the law of equity. One of the rules demands that those that require equity must have ‘clean hands’ and should be devoid of any misbehavior (Marson and Ferris, 2015, pg 44). Additionally, claims should be put forward in due time without causing any delays. Finally, those seeking equitable remedies should behave appropriately.
Conventions despite being referred to as ‘soft laws’, are vital in regulating the actions of the government and a number of areas in the constitution. They are not strictly enforced, and offer some form of flexibility. Customs are laws that have been exercised over a very long period, and are usually unwritten (Duxbury, N. 2017, pg 18).
The English Court System
The English court system is composed of numerous courts that deal with cases according to their position in the judicial system. Different courts are given the mandate to deal with either civil cases or criminal cases. The court occupying the highest position is the Supreme Court. Judges preside over different cases in the different levels of courts and the judicial appointment commission oversees the election of these judges in a manner that is fair and transparent. The court of appeal is the second highest with the High Court and the County Court following close by.
The Supreme Court is the final destination for all the appeals in both criminal issues and civil issues. For most commonwealth countries, the Privy council serves as the ultimate appellate court and is made up of Supreme Court judges, the Lord Chancellor, and the Lords of Appeal (Marson and Ferris, 2015, pg 64). In addition to handling appeals, the Privy council also handles legislative matters. In this role, the cabinet Ministers and some junior ministers come together every month to deal with affairs of chartered bodies.
The High Court consists of three areas. The Queen’s Bench deals with appeals from the county courts and has the authority to also preside over criminal cases. These play a vital role in business operations since legislation may lead to criminal liability. An example of this is the consumer protection Act of 1987 (Marson and Ferris, 2015, pg 64). The Chancery and the family division comprise the other 2 sections.
The tribunal system in the United Kingdom is an independent legal body that specializes in different aspects of law such as employment, immigration and agriculture. Tribunals operate on their own special terms and procedures that are less strict and less formal than those used by the courts. They are made up of tribunal members and a tribunal judge. These personnel may not necessarily be experts in legal matters, but are highly skilled in other relevant professions. Tribunals are very advantageous as they solve cases faster therefore reducing workload in the rest of the courts. They are also cheaper and employ informal methods. However, procedures may at times portray a certain degree of complexity and free legal assistance may sometimes be inadequate.
Alternative Dispute Resolution Methods
Disputing parties are usually required by law to seek alternative means to solve their cases before bringing them forward to the courts. Failure to do so may lead to the parties incurring unnecessary costs. These alternative dispute resolution methods tend to be cooperative rather than adversarial and include arbitration, conciliation and mediation.
In arbitration, parties are required to select an individual known as an arbitrator. The arbitrator is expected to exercise fairness and impartiality when presiding over the case. This is due to the Arbitration act of 1996. If the parties are unable to appoint a suitable arbitrator, the court takes on the responsibility of providing one. The arbitrator is tasked with coming up with a suitable judgment or solution that will be able to appease both parties. In theevent that one of the parties is not satisfied with the judgment passed, they are allowed to file an appeal in the High Court. Such instances are however rare.
Meditation mainly involves evaluating and assessing a particular legal issue brought forward by the conflicting parties. A mediator is appointed by the parties and has the mandate to ensure that the two reach an amicable agreement. He is not required to present his personal views on the matter but rather assist the parties in finding a neutral ground and a satisfactory solution.
Conciliation adopts an interventionist technique whereby the conciliator presents the parties with appropriate solutions and personal opinions on how to solve the matter at hand. He is also required to be impartial in tackling the issues and portray confidentiality regarding the matter.
Alternative dispute resolution methods are advantageous due to the fact that it is mainly centered on co-operative techniques and saves a lot of time and money in dealing with legal problems. However, these methods tend to come with certain shortcomings. For instance, Legal protection is not offered and if the issue is unable to be solved, a higher cost is incurred.
International Dispute Resolution Methods
There are a number of various systems that deal with resolution of disputes on an international level and incorporate certain methods in solving these conflicts. The World Trade Organization (WTO) dispute resolution system incorporates methods such as consultation, adjudication by special panels, conciliation, arbitration and mediation. Only members of the WTO can have access to these particular methods of conflict resolution. The WTO has total jurisdiction over any conflict arising between two members and this jurisdiction is compulsory. This system aims to appropriately solve disputes between members and achieve a satisfactory outcome that is compliant with the organization’s agreements.
The first step in dispute resolution is consultation, whereby the parties notify the Dispute Settlement Body (DSB) and engage in consultation over a certain period. If this fails to resolve the conflict, a panel consisting of 3 members is formed to carry out adjudication of the matter. A series of meetings are held by the panel and the parties in conflict over a certain period of time. The panel thereafter compiles a report detailing the contents of the dispute, the arguments and claims brought forward by both parties, the findings and recommendations made by the panel. This report is then sent to the DSB for enforcement. Failure to comply to the report by the party at fault may lead to the imposition of trade sanctions by the rest of the members in retaliation.
An appeal can be made by one of the parties concerning the panel report. The Appellate body is responsible for reviewing the dispute and is the final level in adjudication of the legal matter. After an agreement is reached, the party that is at fault is required to immediately comply with the decision reached by the body.
Arbitration is another method that may be used by the WTO to resolve conflict. It is mostly used as an alternative method as opposed to adjudication by the special panels. An arbitrator presides over the legal issue and assists the parties in coming up with a solution for the problem. In mediation, a solution is reached through the help of an impartial mediator. The two parties approach the issue cooperatively aided by the guidance of the mediator.
National courts can also be used resolve international disputes. The party making the claim has the upper hand therefore the dispute is taken to the national court of its country. Certain clauses are applied in cases where the national court is tasked with the mandate of presiding over an international dispute. The choice of forum clause ensures that a dispute is presided over by a particular national court as per the requirements of the contract binding the parties. The choice of law clause dictates the kind of laws to be applied by a national court when dealing with a particular international conflict.
The Act of state doctrine proposes that a country’s domestic actions or laws are restricted within its borders and may not be taken into account by another country’s court. It prevents other courts outside its borders from interfering with the decisions reached. Some countries may also be presented with immunity from the actions of other states’ courts.
Role and Application of Ethics in Business
Ethics are the basic principles that control how a person behaves. In the business world, ethics are a vital component of the success of any particular business. These principles act as moral codes that govern the effective running of a business or enterprise. Ethics play various key roles in business and are applied in a number of ways.
Ethics play a key role in employee motivation and improvement of output. Incorporating ethical values in the business environment enhances morale in the workforce hence the quality of work is improved. Additionally, a business that incorporates ethics into its workplace builds a positive reputation, hence attracting more customers and investors. This increases profits hence facilitating growth of the business. Ethics in business also promotes positive values such as transparency and accountability among employees. Furthermore, it enhances social responsibility by facilitating environmental friendly practices such as recycling of waste and cleaning up the surrounding.
The legal framework in the UK is complex and the laws governing business operations are straightforward and clear. The procedures in the court are quite fair and ensure that justice is served accordingly. The monarch as well as the Legislature work hand in hand to ensure the smooth running of the state. All the systems work in synchrony to bring about a more harmonious state, especially in the conduction of various businesses within the region. Therefore, it is essential for individuals to properly comprehend the established rules and regulations to guarantee the success of their enterprises and to avoid the creation of legal barriers.
Duxbury, N., 2017. Custom as law in English law: Cambridge law journal, 0008-1973, Cambridge LawJournal and Contributors.
Marson, J.and Ferris, K., 2015. Business Law. Oxford University Press.