UK & Europe
Insurance & Reinsurance
Recent announcements in response to COVID-19 have effectively put the UK into lockdown, with strict rules being imposed on companies, enabling the compulsory closure of many outlets. In this article, we look at the implications for businesses in these uncertain times and the potential criminal penalties for non-compliance.
UPDATE 09/04 - The Health Protection (Coronavirus, Business Closure) (England) Regulations 2020 have been revoked by the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020, which now sets out the restrictions on business activities and the power to close premises.
A copy of the updated Regulations can be found here - http://www.legislation.gov.uk/uksi/2020/350/regulation/4/made
What are the Regulations?
The introduction of The Health Protection (Coronavirus, Business Closure) (England) Regulations 2020, and similar Regulations covering Wales, came into effect on 21 March 2020. The Regulations are to be reviewed by the Secretary of State every 28 days, and expire after 6 months.
Specifically, under Regulation 2, businesses must close any premises, or part of the premises, in which food or drink are sold for consumption on those premises, and to cease selling food or drink for consumption on its premises; or if the business sells food or drink for consumption off the premises, cease selling food or drink for consumption on its premises during the relevant period.
Which businesses are affected?
The Regulations effectively close all businesses selling food and drink for consumption on its premises.
Schedule 1 of the Regulations state the following businesses must close:
Restaurants, including restaurants and dining rooms in hotels or members clubs.
Cafés, including workplace canteens, but not including—
(a) cafés or canteens at a hospital, care home or school;
(b) canteens at a prison or an establishment intended for use for naval, military or air force purposes or for the purposes of the Department of the Secretary of State responsible for defence;
(c) services providing food or drink to the homeless.
Bars, including bars in hotels or members’ clubs.
Museums and galleries.
Indoor skating rinks.
Indoor fitness studios, gyms, swimming pools or other indoor leisure centres.
Of course, businesses who would ordinarily be subject to closures under the Regulations can continue to supply take away food items.
Who is responsible for compliance?
It is an offence for any person, without reasonable excuse, not to comply with the above restrictions. In addition, it is an offence to obstruct, without reasonable excuse, anyone carrying out a function under the Regulations. In the case of a company, an officer (as well as the company) can be held responsible if they committed, allowed or through their neglect permitted the breach.
Compliance is enforced by a ‘relevant person’ which may include a constable, a police community support officer or, in respect of closing businesses, a person designated by the local council.
What are the penalties for non-compliance?
Action can be taken to close any business operating in contravention of these Regulations. These actions are likely to include the issuing of prohibition notices, and restriction or removal of licenses. Further, an unlimited fine can be imposed on the business or individual officer of the company who has consented or connived to keep the business open.
In addition to the above, and perhaps just as importantly, there are likely to be huge reputational implications for those businesses that are deemed to be flouting the law in times of national and global crisis.
Where business sectors are currently allowed to continue to operate, please see our article examining how businesses can use existing risk assessment tools to face this new threat to ensure compliance with Government guidance.
With further lockdown measures anticipated, additional businesses may well be added to this list in due course. Those that fail to comply are likely to face swift enforcement action. Watch this space!
Author: Steven North, Senior Associate.
If you would like to discuss any aspect of this article further, please get in touch with a member of our team at firstname.lastname@example.org