March 2020
Covid-19: Legal Synopsis
The recent outbreak of the novel coronavirus has caused disruption across the world and Kenya is no exception. Containment measures, including lockdowns of cities, extensions of public holidays, closures of public services (e.g. courts), cancellation of events, unprecedented “work from home” arrangements, international travel restrictions and quarantine measures are having worldwide impacts.
In light of the foregoing there is need to undertake a legal synopsis of International policy intervention, specific Government policy(country –country policies),international trade and commerce and the overall effect of Covid 19 at a country level with an eye on the global effect of Covid 19.,
Towards this end its critical for legal practitioners to take note of the following in mitigation of the emerging legal effects caused by Covid 19.The key Identifiable issues during this pandemic are;-
- Succession and Crisis management: review existing policies and ensure key employees and management are familiar with them. Who has authority to make immediate decisions with respect to the crisis? Develop a consistent and effective communication plan.
- Employment issues: employers generally owe a duty to ensure that reasonable care is taken to safeguard the health and safety of employees at work. Review and assess what changes may be necessary or appropriate for your HR policies, such as absenteeism, leave, flexible work and overseas travel.
- Business continuity: are you prepared for the possible implications on the business of travel restrictions and quarantines? How will you keep the business operating on skeleton staff, or will you have to shut up shop? For example, businesses in the retail and hospitality industries may be particularly affected by a lack of customers and staff in the event of widespread quarantine arrangements.
- Dispute resolution: any event that leads to public disruption can be a fertile breeding ground for disputes to arise. Consider carefully commercial contract terms, including force majeure and notice requirements, and be alert to inadvertently agreeing to a contractual variation/waiver.
- Communication is key: clear communications will be needed with key stakeholders as to the impact of the spread of coronavirus on the business. Investors, customers, suppliers, and staff will all need to be informed about how the business is dealing with the issue and what it means for them.
- Listed companies need to bear in mind disclosure obligations: a material disruption to the company’s business; material impairment of business performance or outlook; a material change in the company’s business plan; or a pending transaction likely to be cancelled or delayed as a result of the outbreak might all necessitate an announcement.
- Financial reporting: companies need to consider whether to refer to the possible impact of COVID-19 on their business in their reporting of principal risks and uncertainties, and, potentially, in the carrying value of assets and liabilities and should ensure that they provide up-to-date and meaningful disclosure. Capital markets and loan financing: issuers or underwriters working on international offerings may need to consider the impact on: diligence and disclosure, consents, approvals, termination and settlement dates.
- Government Action on Covid 19 and attendant consequences of government intervention both on Legislation touching on taxation, safety protocols, trade and commerce,
Special acknowledgement to linklaters.
Dennis Kirwa Advocate