< Previous East Midlands Business Link www.eastmidlandsbusinesslink.co.uk HOPKINS SOLICITORS Q&A What should I do if I have overdue invoices due to my business? The most important aspect of debt recovery is to ensure you do not delay in taking action to recover debts. Initially, this includes basic things such as sending outstanding invoice reminders. It is important to implement a good system of credit control within your business, and reminders yourself. Once it becomes apparent that further action is going to be necessary, then the two principle options are either serve a Statutory Demand for payment or issue a Claim for a Judgment in the County Court. Before a court claim is issued, it is necessary to send a formal letter of claim and often, instructing a solicitor to send such a letter is sufficient warning for the Debtor to pay the outstanding sums. Option 1: Statutory Demand This is a formal demand, which must be made in a form compliant with the relevant insolvency rules, which gives the debt 21 days to pay the debt. If the debtor does not pay, then the creditor can apply to court to make an individual debtor bankrupt or to wind up a company in the case of a company debtor. Q&A Hopkins Solicitors Legal Guide to Debt Collection Overdue and unpaid invoices are a common concern for any business owner. This month we spoke to Carl Wright, Partner & Head of Litigation at Hopkins Solicitors, to find out what options are available to businesses. WE’RE HERE TO help Carl Wright, Partner & Head of Litigation schedule reminders so you don’t forget to chase up outstanding invoices. The general rule is the longer you delay, and the longer the invoice is therefore overdue, the less likely you are to ultimately recover the debt. What options are available for me to recover those debts? Initially, you will need to send 30-31.qxp_Layout 1 07/06/2022 09:31 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link HOPKINS SOLICITORS Q&A The Statutory Demand is an effective method of debt recovery if the Debtor has the funds to pay but is delaying in paying. The statutory demand and indeed the bankruptcy/winding up process are not effective if the debtor simply has insufficient means to pay. The Statutory Demand cannot be used if a debt is disputed, as the Debtor can set the Demand aside or seek an Order to Restrain the presenting of a Winding Up Petition. Option 2: Claim via the County Court This is a claim for the court to issue a Judgment confirming the debt is owed. It can be used where the debt is disputed, albeit the creditor will have to prove their claim to get judgment. This process is a more flexible way to seek to recover a debt than serving a statutory demand. Once a Judgment is obtained, the creditor has a number of options in terms of enforcing payment if the Debtor still does not pay. Often a Judgment is enough to get the debtor to pay, but if not, the Creditor can take steps to enforce a Judgment. * Seeking an order to sell property/land once a charging order has been placed on the property/land to secure the debt * Seeking an order to freeze a bank account and for the bank to pay directly to the creditor sums in the account up to the amount of the debt * Seeking an order that a third party which owes money to the Debtor, pays money to the Creditor * Summonsing the Debtor to court to provide information about their/its assets for the purposes of taking enforcement action Hopkins Solicitors are a highly trusted local firm and their Litigation and Dispute Resolution Team provide legal advice to local businesses on a wide range of commercial matters. If you would like to book a consultation, contact us on 01623 460460. I have the court order but the debtor still hasn’t paid me, what are my options to actually enforce the Judgment? Once a county court Judgment has been obtained then there are a number of enforcement options if the Debtor still does not pay. These include: * Winding up or bankruptcy * Instructing bailiffs to attend upon the Debtor to attempt to seize assets to pay the debt * Securing the debt by placing a charging order against any property/land owned by the debtor 30-31.qxp_Layout 1 07/06/2022 09:31 Page 2 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk INSURANCE U nderstanding business insurance can often be a minefield, filled with confusing jargon and nonsensical package offers. The COVID-19 outbreak added an extra layer of confusion when policy holders scrambled to determine what (if any) cover their insurer provided for pandemic-related losses. In fact, survey data suggests that the pandemic has dramatically influenced buyer demands for greater coverage options, with increased flexibility for shifting policy requirements. This has led the government to propose a regulatory overhaul of the insurance sector, with a view to more tailored and timely investigations, and increased investment for revamping existing infrastructure. We shall first seek to understand the proposed changes to the industry, and then what this means for business owners in our area. As the UK moves into a post-Brexit space, the government is seeking to unlock tens of billions of pounds of investment into the insurance sector by reforming the industry via slashing red tape, as it was announced in February this year. Since 2016, the sector has been under the Solvency II rules, designed to harmonise EU insurance regulation. Many within the sector consider the Solvency II initiative to be overly bureaucratic and burdensome. John Glen, Economic Secretary to the Treasury, said the proposed overhaul would allow the sector to be more agile and easily adaptable. He said the new, UK-focused regime will facilitate rather than hinder market advancements, support the entry of new and innovative firms and expediate investment by more easily releasing capital. Safeguarding policy holders will remain the core priority. Developed in collaboration with the Prudential Regulation Authority (PRA), the reforms are said to substantially reduce the risk margin, including a reduction of approximately 60 – 70% for long-term insurers. The PRA already has extensive powers to address risks to firms. With the removal of certain regulatory restrictions, the PRA would have greater flexibility to tailor case management to individual firms, thus providing some additional protection against firm failure. The proposed Solvency II reforms include: More sensitive treatment of credit risk in the matching adjustment. A significant increase in flexibility to allow insurers to invest in long-term Markets change and insurance is no exception. In a post-COVID world the rules may soon be changing. It’s best for East Midlands companies to have a solid grasp of what that might mean. Evolving insurance 32-34.qxp_Layout 1 07/06/2022 09:33 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link INSURANCE assets such as infrastructure. A meaningful reduction in the current reporting and administrative burden on firms. Put simply, these proposed changes will mean that insurance firms will be able to provide more individualised services, by having less administrative requirements and being able to invest more easily. Therefore, there is less need to pass on certain costs to the consumer, and insure their own security via tight and confusing policies. So, now that the proposed changes are clearer, where does that leave business owners when deciding on insurance packages? As an employer, employers’ liability insurance is currently a legal requirement. This is not due to change under the proposed regulatory overhaul. This will cover the costs incurred by work related injuries or illnesses. It will cover not only employee compensation, but also any relevant legal fees. If a business uses motor vehicles for travel or delivery, business motor insurance is also required. At minimum, ‘third party only’ cover is required, which covers damage and injury to third party vehicles and drivers. If employees will be driving company vehicles, then it is also a legal requirement to cover them. © stock.adobe.com/alexlmx 34 Á 32-34.qxp_Layout 1 07/06/2022 09:33 Page 2 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk INSURANCE As with any insurance cover, the cost is dependent upon the type of business, number of employees and claim history. Doing research and shopping around to get the best cover for your business is the best way to understand the available deals which are appropriate for your business. This should not be based solely on cost, as cheaper deals may not cover for certain events, which could be more costly if they came to pass. It is generally more important to ensure you have the correct amount and type of insurance for your business, as different business have different risk profiles. There are other types of insurance that should be considered. If you’re running a small or medium-sized business, you may benefit from public liability insurance. This covers compensation to members of the public for any negligence related injury, death or damage. Similarly, product liability insurance covers against any product fault, and professional indemnity insurance protects against compensation to clients for losses incurred by professional advice given. If your business owns any property, or has stock and equipment stored in rented property, it is highly recommended that these are insured against unexpected damage. This could cause the business to temporarily cease operation, and insurance could cinch the business’s survival. This would generally be considered business interruption insurance, and is often sold as an additional extra, but could be well worth the additional pounds. Even if you have moved away from tangible assets, cyber assets could still be at risk. Cyber insurance provides cover against malicious cyber security breaches (such as viruses) and non-malicious incidents (such as accidental GDPR breaches). Cyber insurance can provide cover for business interruption caused by these events, in addition to cyber extortion, damage to digital property, media liability and some third-party costs. Many cyber insurance policies offer services to help you assess current cyber risks and how to protect your business from these. As all these policies show, it is important to understand specific business risk profiles when considering policy packages. It also becomes clear why the government is pushing for greater flexibility over regulation. It would allow for policy holders to demand openness and flexibility from providers, whilst taking comfort that their protection is being safeguarded. Similarly, providers could take advantage of a growing competitive market, without being able to exploit consumer concern over instability. As with many things, the cheapest policy may not always be the best. Yet, be wary of premiums on insurance packages rather than individual policies. Shop around to ensure the best cover for the price. There are comparison sites which help you determine the best combination within your budget and business needs. Whilst nobody can predict the future, the last few years have demonstrated that it is best to be as prepared as possible. © stock.adobe.com/Michail Petrov 32-34.qxp_Layout 1 07/06/2022 09:33 Page 3www.eastmidlandsbusinesslink.co.uk East Midlands Business Link CONSTRUCTION G enerally considered a sector of great security, the housing market is currently experiencing a boom, with house prices soaring. Yet, underneath this, inflation is affecting the construction industry like any other. In the aftermath of COVID-19, the sector was already undergoing quantity issues with supply chain disruption. Difficulty accessing vital materials has caused the cost of supplies to increase exponentially, recently as high as 50%. Additionally, inflation also rose by 9 per cent in the 12 months to April, according to the Office for National Statistics. This will inevitably have a knock-on effect for the consumer, with experts warning that the housing affordability gap is widening, with increased numbers of people finding it difficult to access mortgages. How can the industry resolve this impending crisis? The largest issue facing the construction industry is sales vs volume. Pressures on the supply chain, already concerning before the war in Ukraine, has caused inflation. Heavy building materials, the largest product category in the sector, have seen increased value (have been bought for) of 17.4%, but have only increased in volume (amount sold) by 5% in the first quarter of 2022. This product category hosts some of the most energy and labour-intensive products, such as bricks, cement, and plasterboard. This adds to inflation concerns due to the additional costs of using the materials. Even more affected are timber and joinery products. Year on year analysis shows the value up by 21.4%, yet volume is down by 11.3%. This amounts to an incredibly significant price increase of 36.9% since early 2021. Chief Executive of the Builders Merchants Federation, Under pressure A war in Ukraine and a labour shortage are holding back what would otherwise be one of the strongest sectors in the country. 36 Á © stock.adobe.com/Freedomz 35-37.qxp_Layout 1 07/06/2022 09:35 Page 1CONSTRUCTION John Newcomb, warned that the growth figures should not overshadow the genuine disparity issue between price and volume levels. The existing issue has been exacerbated as a direct result of the conflict in Ukraine. Mr Newcomb warned that the ongoing nature of the war means that pressure on the supply chain could continue for some time. Combined with inflation on energy and labour costs, this issue could remain for the rest of 2022. The situation is so complex, that experts cannot accurately give 2022 comparisons because supplier costs increase every time surveys are administered. Suppliers cannot guarantee a hold on product costs, or the actual availability of the materials. All this means that pre-tax profit margins could be halved. Builders must be able to demonstrate a large enough profit margin to meet funding criteria for their projects, meaning that the costs must be passed on to the customer for projects to commence. Ultimately, the consumers (both buyers and sellers) are being disadvantaged, as house prices are increasingly unpredictable. In the last 12 months, prices for new build homes have increased by more than 10 percent. In April 2022, the average cost of a new build house in Northeast Lincolnshire was £232, 457. This figure is an inflation of 14 percent from April 2020, when the same homes would have cost £204, 135. Perhaps unsurprisingly, first time buyers are the most affected by this, especially as a group to whom new builds have a particular appeal. A secondary inflation-related issue is that of recruitment. Over the past 12 months, the average number of vacancies in construction for each over- lapping quarter is 38,000. Construction is a UK industry that hugely benefitted from being part of the EU, as it grew to rely on EU nationals as a large part of the workforce. In the wake of Brexit, construction more than most industries is experiencing an employee deficit. These employee shortages are particularly noticeable across our region, as a region with typically higher than average numbers of migrant workers. This means that there is more competition for the remaining workers, which has led to wage inflation across the sector, alongside the necessary inflation to counteract the cost-of-living crisis. Ultimately, this will increase the budget of any project, and will once again have to be passed onto the consumer. This once again increases the risk that some will be priced out of the market. Iain Parker, partner at Alinea Consulting, says that the solution is bringing in more people from the bottom. This could include increased numbers of apprenticeships available to school leavers, and those looking for a career change. Although this projects a rather gloomy outlook, work is being done to mitigate the effects of inflation on the industry. The Construction Leadership Council (CLC) have drawn up a five-point plan of action. The key aim of the plan is to resolve the availability and cost issues, whilst considering the current global position. The plan includes: Developing market intelligence about risk hotspots; Publishing guidance on price inflation indexation and commercial issues; Preparing case studies on good practice in response to current inflation; Running industry briefings on conflict avoidance; and Researching long-term capacity loss from Ukraine, Russia and Belarus, and the impact on the sector. The CLC added that the plan also represents ambitions to steer a coordinated, industry-wide collaboration © stock.adobe.com/Hoda Bogdan East Midlands Business Link 35-37.qxp_Layout 1 07/06/2022 09:35 Page 2East Midlands Business Link CONSTRUCTION to reduce the impact of inflation. The five-point plan represents good practice ideologies for the future. Eddie Taaffe, programme co-ordinator of the Housing Delivery and Co-ordination Office, told the committee there is an opportunity to reduce costs by using more modern methods of construction and greater off- site fabrication. Mr Taaffe stressed that no one actor can resolve this issue, and that client, contractors, and all in the supply chain must collaborate to tackle inflation. Across our region, this could mean fostering greater dialogue between the construction giants such as Lindum and Gelder, and smaller building companies. Whilst we greatly benefit in many ways from a global economy, this means that we will be just as negatively affected by global events. The bad news is that material inflation may remain, and even increase for some time, compounded by supply chain issues. On a more positive note, it is in the interests of the entire industry to tackle the issue. This means that concerted efforts are being made to curb inflation and provides hope that the situation could improve by the last quarter of 2022. © stock.adobe.com/Tomasz Zajda 35-37.qxp_Layout 1 07/06/2022 09:35 Page 3 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk PUBLIC RELATIONS Or is it the other way around? If you are easily offended by clumsy humour in an effort to attract attention, look away now. However, if you don’t find digital outdoor posters showing an animation with the slogan “For fettucine’s sake” shocking, read on brave reader. For these are the crimes against humour and humanity that befall Tesco right now after the Advertising Standards Authority (ASA) said they were likely to cause “serious and widespread offence.” I mean, I was offended by how BAD animation displayed the text: “What a load of shiitake.” An image of a mushroom covering the last three letters was seen to roll away. Now, you know I’m a fungi but let’s look at this seriously for a moment from the PR point of view. First, Tesco has apologised and said it was trying to portray customer frustration. Genius move. Acknowledge the “error” yet reinforce the key message at the same time. Remember, a line underneath the ad said that big mobile networks were raising customers’ bills. “What a load of shiitake” - advertising watchdog takes the pistachio out of Tesco Greg Simpson, founder of Press for Attention PR and the PR and Communications Ambassador for the IoD in Nottinghamshire and Derbyshire, shows what can be learned from Tesco’s recent advertising ‘controversy’. they were, not the poor taste. Yet the ASA said it had received 52 complaints that the ads were offensive because they alluded to swear words, with some people objecting that they were displayed in places where they could be seen by children. Imagine the horror…in one example, three images of pasta covered all but the letter F in “fettucine” before rolling away to reveal the slogan in full. Not mushroom for error… In one sponsored Twitter post an 38-39.qxp_Layout 1 07/06/2022 09:36 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link PUBLIC RELATIONS However, the ASA said the words they were alluding to were “so likely to offend that they should not generally be used or alluded to in advertising, regardless of whether they were used in a tongue-in- cheek manner.” So imagine how far said tongue was implanted into said cheek when they replied with this little beauty: “We’re really sorry for any offence caused. We know the frustration that consumers face when they notice their mobile phone bill has gone up mid-contract and we were reflecting their frustration - and ours - in these ads. We’re proud to offer our mobile customers supermarket value, and so we used a play on words relating to food products.” Another great apology whilst hammering home the message loud and clear! And now…the case is all over the mainstream media at absolutely ZERO COST! Remember, if played correctly, when it comes to PR controversy, sometimes, every little helps. A former business journalist, Greg Simpson is the author of The Small Business Guide to PR and has been recognised as one of the UK’s top 5 PR consultants, having set up Press for Attention PR in 2008. He has worked for FTSE 100 firms, charities and start-ups and conducted press conferences with Sir Richard Branson and James Caan. His background ensures a deep understanding of every facet of a successful PR campaign – from a journalist’s, client’s, and consultant’s perspective. 38-39.qxp_Layout 1 07/06/2022 09:36 Page 2Next >