Professor Mark Watson-Gandy is a British lawyer and educationalist, specialising in UK insolvency law. We learn more about his experiences and views on company law, ethics and education…
Do you feel there are adequate resources available for new business owners to ensure they are complying with the law?
The problem is not the adequacy of the resources but the sheer volume of new law that businesspeople have to keep abreast of. If you are running a company, you simply are not going to have much spare time to start reading statutes. You want to comply with the law, but you need it to be made easy for you.
You are also a legal author and published several books on legal topics. Your latest book is based on Contract Law… What made you decide to create a guide to Contract Law for business owners?
I am passionate about the need to make the law more accessible. Even my practitioner texts contain tool kits and precedents to help the reader to practically apply the law.
It always struck me, however, that Contract Law needed to be better and more widely explained. After all, it affects everybody’s lives on a day-to-day basis.
Most business owners will be required to understand aspects of contract law, either for commercial agreements or for their employees. What is the best approach for small business owners when drafting legal terms…
Your terms and conditions are crucial for your business. They often don’t need to be very complicated, but it is a false economy not to have them looked over by a lawyer.
Most disputes are resolved through arbitration than actual legal proceedings. What are the key elements when resolving commercial disputes?
Whether one resolves disputes by arbitration or litigation, the process usually involves a number of steps before trial: (1) The parties exchanging pleadings (a brief statement of the core facts and the legal principle relied on), (2) Witness statements (the evidence relied on to expand on and prove the matters in the pleading), (3) Disclosure (where the parties exchange documents relevant to the case).
Either way going to trial is usually a horribly expensive and risky process. Parties need to be open to negotiating a settlement whether informally or through mediation.
Are there any steps a business owner can take to ensure they are protected against commercial disputes and potential litigation?
There is no sure-fire way of protecting yourself, but you can do things to limit the risks to yourself and your business. Insurance can soften the financial blow. A well drafted contract may provide some legal armour. Very often I see people ending in court not because they intended to breach the contract but because they misunderstand what they have signed up to. This is not as surprising as you might think.
Often the lawyers you asked to formally record the bargain you struck will carry on the negotiations with their opposite numbers as they draft up the final perfected contract. In practice, this may mean you will end up with a subtly different contract to the bargain you thought you had struck. Make sure the lawyers do a pre-signing read through with both you and the other side, to explain what they have written. If there are issues, then it is always better and easier to fix them there and then whilst the parties are on good terms and anxious to get the deal done rather than two years down the line in court.
The British Legal System is the benchmark across the world for setting Laws… Why do you feel we have a strong theme of equity and justice engrained in our history?
The idea that every citizen has a right to demand fair and prompt justice is entrenched as far back as the Magna Carta. The idea that the king could owe a reciprocal duty to his subjects was a powerful and radical idea at the time and has fired people’s imagination ever since. For our lawyers and judges it meant they were now charged with the responsibility to be the final check against abuse of power.
Can you envisage a time where automation through bots will be used in arbitration and resolving disputes or do you feel the human interpretation of the laws is fundamental to its effectiveness?
I believe that there will always be a role for the human element. As far back as the days of the Courts of Equity, there was a recognition that there will always be occasions where there is a need to temper the harshness of the law with common sense and compassion. The English common law is an ever-evolving creature. When you are in the business of solving human problems, you need an understanding of human nature.
How important is it for business owners to have a separate policy for ethics and business practices?
Company directors are fixed with a number of fiduciary duties. These include under section 172 Companies Act 2006 weighing up a number of ethical considerations each time they make decisions affecting the company. The personal risks they run if they ignore those duties are very real.
What are your top tips to anyone starting a business?
Field Marshal Erwin Rommel said, “Time spent in reconnaissance is seldom wasted”. Test the market as much as you can. You won’t get things right first time. Find out what works and what doesn’t so when you actually launch you are as sure as you can be that you have the winning formula.
Act like the company you want to be from the start. Register those trademarks. Meticulously maintain the company’s registers and books. Do proper minuted board meetings. It may seem unnecessary and overly formal at the start but it will pay dividends years down the line, if you, say, ever come to raise finance or sell the business. It ensures you have no skeletons in the cupboard when they do due diligence.
And it never hurts to have some properly drafted contracts …
Simple Contract Law: A Brief Introduction to English Contract Law by Professor Mark Watson-Gandy is available now on Amazon Bookstore in paperback and eBook formats, priced £9.95/£7.95.