Get independent advice before embarking on costly business litigation

conflict dispute litigation Jul 30, 2019

It is a sad fact that disagreements can arise in the best-run businesses and if they cannot be settled amicably they can result in costly business litigation.

It is also a sad fact that legal fees are often far greater than the damages awarded and. Worse, if you lose and have to pay those of the other side.

While most litigation involves a financial settlement, the underlying dispute can be for a myriad of reasons. Many disputes relate to the non-payment for goods or services that one party believes were provided while the other believes were defective or the terms were not observed. Others may be down to parties falling out or wanting to terminate contracts. Whatever the cause taking issues to court can be extremely expensive if the facts are in dispute.

Often when each side feels that it has much to lose emotions will run high and judgement may be less than impartial.

Very often, when the parties involved realise the length of time that may be involved and the escalation of costs...

Continue Reading...

Can fashion retail ever be made sustainable?

governance retail women Jul 25, 2019

It is no secret that High Street retail has been in dire straits for some time, and clothing and fashion retail have particularly suffered.

The most recent, and perhaps most high-profile example has been the struggles of Philip Green’s Arcadia Group, comprising the clothing chains Topshop, Topman, Evans, Wallis, Miss Selfridge, Burton and Dorothy Perkins, to use CVAs as a way of restructuring.

But it is not only physical fashion retail stores that are struggling. ASOS has recently issued its second profit warning in seven months, albeit blaming IT chaos in its overseas warehouses despite overall sales being up 12% in the four months to 30th June.

Obviously, cheap prices and turning around lines quickly, have been the two main things on which fashion retail has been relying. As a consequence, clothes are often made by low-paid workers in appalling conditions, in factories located in countries like Bangladesh.

However, for some years there have been demands from...

Continue Reading...

Long term corporate survival can only be achieved by having the right values

There are signs that the Gordon Gekko culture of “greed is good” is dying and that corporate survival will depend on not only giving customers what they want but also being seen to have and act on a wide range of ethical values and behaviours.

In an environment of high employment and significant skill shortages in many sectors, the bargaining power of millennials and Generation X will only strengthen as the older generation of employees retires.

Equally, the power of consumers and customers choosing who to buy from is having a greater impact on corporates’ processes and practices.

In this context, CSR (Corporate Social Responsibility) policies will no longer be enough. Too many of them have been unmasked as marketing and PR exercises among the larger corporations and of little practical substance. SMEs often fare better, however, being closer to their localities and customer base, where their greater visibility puts them under pressure to be more accountable.

...
Continue Reading...

What are the prospects for UK manufacturing?

economy growth productivity Jul 18, 2019

UK manufacturing output growth held steady in the three months to May, according to the Confederation for British Industry’s (CBI) monthly industrial trends survey.

In July, the CBI reported that in the three months to June UK factory output had turned in its slowest quarterly growth since April 2016.

Furthermore, the CBI reported that ten out of sixteen sub-sectors experienced growth with chemicals, food, drink and tobacco being resilient, while car manufacturing struggled.

Confusingly the CBI also reported that order books deteriorated in the quarter.

By comparison the monthly snapshot from IHS Markit and the Chartered Institute of Procurement and Supply showed that activity levels in the UK manufacturing sector in June had dropped to the lowest level since February 2013.

IHS Markit/Cips found that high stock levels, ongoing Brexit uncertainty, a deteriorating economic backdrop and rising competition contributed to the drop in output. Weak export demand amid a...

Continue Reading...

Proposed HMRC preferential status a blow to financing and restructuring

The Government last week published its new draft Finance Bill, which includes the proposal to restore HMRC preferential status as a creditor for distribution in insolvency. This was originally granted in the Insolvency Act 1986 but removed by the Enterprise Act 2002.

In summary, HMRC is currently an unsecured creditor ranking equally with suppliers as trade creditors and unsecured lenders for any pay-out to creditors from an insolvent company. The preference would mean they get paid ahead of unsecured creditors leaving less or nothing for most creditors whose support is necessary when restructuring a company.

There had already been considerable consternation expressed by insolvency practitioners and investors after Chancellor Philip Hammond announced the proposal in the Spring, but it seems the Government has decided to press on making only a light amendment to the effect that preferential status will not apply to insolvency proceedings commenced before 6 April 2020.

The...

Continue Reading...

Proposal to strengthen sanctions for late payments culprits

Some 18 months since the appointment of Small Business Commissioner Paul Uppal to tackle the problem of late payments to SME suppliers by larger companies it seems that the situation has barely improved.

In fact, according to research published in June by Purbeck Insurance Services late payment problems have actually got worse for 27% of SMEs with some 30% reporting worsening cash flow problems.

In the first quarter of this year Mr Uppal’s department has overseen the removal or suspension of some 17 companies that had signed up to the Prompt Payment Code (PPC) but failed to meet its standards.

The five removed altogether included BHP Billiton, DHL and GKN Plc. Signatories to the PPC pledge, among other things, agree to pay 95% of all supplier invoices within 60 days.

In its most recent completed case in May 2019 the Small Business Commissioner (SBC) was approached by an SME over the failure by G4S to pay it an invoice for £31,880.49 despite having contracted to do so...

Continue Reading...

The UK Film Industry - how is it doing?

Uncategorized Jul 09, 2019

It’s good to write about a UK business success story, the UK film industry, which has become an important economic sector having grown faster than much of the UK economy.

According to the DCMS (Department for Digital, Media, Culture and Sport) in November 2018 the value of the creative industries as a whole to the UK was up from £94.8 billion in 2016 and had broken through the £100 billion barrier. It said the sectors had grown at nearly twice the rate of the economy since 2010 and together are now worth £268 billion.

For the film world specifically not only does the UK have a widespread and skilled support base of experienced film production crews and technicians, it also has both the locations and the studios to attract the biggest film companies from around the world. It is an industry that employs an estimated 60,000 people.

Then there is the knock-on effect into the wider local economy, not only by boosting the...

Continue Reading...

How much can businesses realistically plan for no-deal Brexit?

brexit economy planning Jul 04, 2019

Clearly businesses are operating in very uncertain economic times with no-deal Brexit having become a game of political football and with such an unpredictable outcome.

While a degree of uncertainty is a fact of life in business, which is why I strongly recommend regular and at least monthly scrutiny of management accounts, the current situation is arguably unprecedented.

We are in the midst of a global economic slowdown, with UK manufacturing activity at its lowest level for six years and the economy stagnating according to the British Chamber of Commerce (BCC) latest quarterly report published last Monday, much of this being self-inflicted following the Brexit referendum.

And worse, the UK is now beset by a contest to elect a new leader for the “governing”, Conservative party in which only a small group of party members have a say, and seemingly with both candidates adopting increasingly intractable positions on leaving the EU by the end-October deadline and even worse...

Continue Reading...

Redefining measures of national economic health

economy growth productivity Jul 02, 2019

For almost 40 years the defining measure of a country’s national economic health has been GDP (Gross Domestic Product).

As such, my monthly Key Indicators have focused on various specific aspects, such as oil prices, factory output or investment decisions and the like. This time, however, given that the summer is generally a time to pause and reflect, the Key Indicator considers this notion of how we measure national economic health.

There are signs of a growing resistance to using such a simplistic measure as GDP to compare the relative success of national economies.

For example, Evan Davies, the BBC’s former economics editor argues: “It is barely an exaggeration to say it has been fetishised in economics, despite obvious weaknesses in its capacity to encapsulate a whole economy in a single number” in an article analysing where economists have been going wrong.

National economies are, he argues, both too complex and too theoretically...

Continue Reading...

Snapshot of UK regional economic inequality

economy Jun 27, 2019

We hear a lot about UK regional economic inequality, so as part of our series of macroeconomic snapshots we’re taking a look at some of the data.

These are just a few examples of recent announcements of businesses facing closure or insolvency in the immediate or near term: British Steel, Scunthorpe (c.3,000 jobs), Honda UK, Swindon (3,500 jobs), Kerry Foods in Burton-upon-Trent (900 jobs). What they all have in common is that they are situated in the regions outside London.

Then, of course, there is the ongoing carnage in the High Street retail sector which according to the British Retail Consortium’s calculations has cost 75,000 jobs since the first quarter of 2018.

The long decline in UK manufacturing, initiated in the 1980s Thatcher era, has hit the regions of the north and Midlands, and S. Wales, particularly hard.

In January this year NIESR (National Institute for Economic and Social Research) calculated that since the mid-1990s regions that now have...

Continue Reading...
Close

50% Complete

Two Step

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.