Jeanne Kelly, a partner at Mason Hayes & Curran, outlines some key legal issues to consider when doing business in the UK.
Over recent years we, at Mason Hayes & Curran, have noticed an upsurge in Irish companies within our client-base looking to expand their activity in the UK. Clients looking to expand into the UK market usually need to know the appropriate tax structure for their business, whether to establish a place of business or a branch, the regulatory regime and other core legal issues that affect the day-to-day running of a business. These include matters such as protection of their intellectual property, employment law and debt collection.
While our laws in Ireland have many similarities to those in England and Wales in particular, it is necessary for companies to familiarise themselves with certain aspects of local law. In particular, some traders overlook that Northern Ireland and Scotland are separate jurisdictions with separate laws to comply with.
Once you, as a business owner, have carried out a market analysis and established who you will be competing against, you should check the legal aspects of current practices and how you intend to reproduce this in the UK. We work with clients to enable them to carry out this process in a way that is as seamless as possible.
All standard commercial agreements, terms of conditions of sale, non-disclosure agreements and similar documentation should be reviewed by a locally qualified lawyer, particularly if they are going to be governed by English law as Irish and English contract law is not identical. One consideration to watch out for under English law is reference in commercial contracts to the Contracts (Rights of Third Parties) Act 1999, which may give third parties rights in a contract they are not party to. There is no similar legislation in Ireland.
From an IP (intellectual property) perspective, consider whether registrations should be made with the UK Intellectual Property Office, if any at all. Also, if you plan to acquire someone else’s IP or licence your own, localised documents should be prepared.
If migrating customer data from Ireland, be conscious of relevant data protection laws governing the export and processing of employees’ and customers’ personally identifying information. When structuring your expansion, care should be exercised if you do not wish your UK activity to radically alter your existing data protection structures. Data protection activities are regulated by the UK Information Commissioner’s Office, which was highly prominent last year in the Leveson Inquiry.
Employment law – No man is an island
Behind every successful business are great employees. For businesses considering establishing a presence in the UK they should be conscious of their obligations as employers and the rights of their employees. Whilst employment law in the UK is based on similar principals to employment law in Ireland, there are differences and, as we all know, the devil is in the detail.
While all employees in the UK, as in Ireland, are entitled to certain basic rights, for example, the right to a written contract of employment, a copy of the employer’s disciplinary procedure, entitlement to time off and so on, we have set out below some of the differences which employers may find interesting when hiring an employee in the UK:
• Employees can ‘opt-out’ of the maximum working week (48 hours per week)
• Retirement ages: Employers can no longer insert a contractual retirement age
• Employees have an entitlement to statutory sick pay, statutory maternity pay and statutory paternity pay – none of which are required in Ireland
• Maternity/adoptive leave entitlements are up to 52 weeks (42 weeks in Ireland)
• Transfer of undertakings: There are considerably different rules in both jurisdictions regarding TUPE
• Redundancy: Statutory consultation periods for both individual and collective redundancies.
While general legal procedures around debt recovery are similar in both the UK and Ireland, there are some significant differences. One much quoted example is that of bankruptcy law in Ireland which currently means a bankruptcy term of 12 years, as opposed to just one year in the UK. This difference goes some way to explaining the current trend of bankruptcy tourism. Admittedly, the Personal Insolvency Act 2012 will reduce this term to three years, assuming full co-operation on the bankrupt’s part.
The Act also introduces three new personal insolvency debt resolution procedures for individuals who cannot pay their personal and mortgage debts, with the procedures overseen by the new Insolvency Service of Ireland.
One of these arrangements, the Debt Settlement Arrangement mirrors the Individual Voluntary Arrangement in the UK, whilst the proposed Debt Relief Notice (unsecured debts below €20,000) is very similar to the UK’s Debt Relief Order regime.
The changes proposed in the Act will bring Irish personal insolvency procedures more in line with those in the UK and elsewhere. That said, the Personal Insolvency Arrangement set out in the Act, which allows for the write down of secured debt, is more ground breaking.
An integrated future
The 800,000 Irish-born people living in UK today underpin the fact that our closest neighbour is naturally and traditionally our biggest market. There are great similarities in business culture, language and legal framework.
The potential to tap into this market is assisted by the work that UKTI does and through organisations such as the British and Irish Chamber of Commerce. There is also the recent Downing Street Initiative signed by An Taoiseach and the UK Prime Minister last year which we predict will have in further integrating our economies in areas such as energy, financial services, tech and agri-business amongst others. Our nearest island is, and must remain, our first port of call.
In summary, don’t assume that the proximity of our lands equates to a similar proximity in our laws.
About the author
Jeanne Kelly is a partner in Mason Hayes & Curran‘s Commercial Department and advises both public and private clients in relation to contract, data protection, telecommunications, information technology and intellectual property issues.
Kelly has co-authored the second edition of Business Law, published by Oxford University Press. She has also co-authored a book on Irish information technology law by Cavendish, a book on data protection law in Ireland published by Thomson Round Hall in 2004, and the Irish chapter of Le traite dessins et des modeles (Greffe, Litec, 2008, France).
She is also is the vice-chairman for the LES Britain and Ireland’s Irish branch and guest lecturer in commercial drafting, electronic commerce law, software licensing law, and data protection law at the Law School of the Law Society of Ireland.