Real Concern that Companies may face Financial Difficulties when State Pandemic Supports are Withdrawn

 

At a William Fry CounselConnect virtual conference this week, over 100 in-house counsel were asked to reflect on how COVID-19 has affected their business and altered the way they work with regards to dispute resolution processes including mediation.

During the interactive session, a short survey found:

  • 60% anticipated that companies might encounter financial difficulties with debtors when state pandemic supports are withdrawn.
  • 67% had been involved in a virtual dispute resolution in the last year.
  • 60% said this virtual process was a court application or hearing.
  • 83% would like to see a hybrid mix of both virtual and in-person dispute resolution processes in the future with only 5% calling for the return of fully in-person processes.

Fergus Doorly, Head of Corporate Restructuring & Insolvency noted: "The government has provided really strong supports for companies throughout the pandemic.  As a result corporate insolvencies only increased by 1% between 2019 and 2020 and in Q1 2021 have decreased by 30%.  However, as the survey results indicate, it is expected that when the government supports are discontinued there will be a marked increase in the number of insolvencies that will occur. To combat this the government is looking to introduce new legislation to allow small enterprises to avail of restructuring processes."

 

Commenting of the changing landscape of the courts, Mr. Justice Michael Quinn, said: “Within a couple of months of Covid-19, the court system responded with hearings across various virtual platforms. So, very quickly and early in the process, we began to hold hearings where witnesses would give their evidence over remote platforms. Overall, this has been a very successful exercise and the use of technology for litigation purposes has been successful and allowed much business to continue on schedule during the pandemic.”

 

Attendees also heard from members of William Fry's Employment Department who highlighted key anticipated legislative developments for employers and employees in 2021 and reviewed the recently launched Code of Practice on the Right to Disconnect. Ailbhe Dennehy, a partner within the Employment Department noted that: "Whilst failure to follow the Code is not an offence itself, such non-adherence can be submitted as evidence before the courts in supporting employee claims under existing legislation.  To demonstrate compliance, employers should develop and implement a tailored right to disconnect policy, put training in place for all staff and review their current approach to time recording mechanisms."


Speakers at the Mid-Year Conference included The Honourable Mr. Justice Michael Quinn, Lyndon MacCann SC, Garrett Breen, head of Litigation & Dispute Resolution; Laura Scott, Litigation & Dispute Resolution partner; Fergus Doorly, Head of Corporate Restructuring & Insolvency; Ian Devlin, head of Pensions; Ailbhe Dennehy, Employment & Benefits partner;  Ciara McLoughlin, Employment & Benefits Senior Associate and  Eimear O'Leary, Employment & Benefits Associate at William Fry.