Government measures in key jurisdictions 5th edition - Flipbook - Page 88
Jersey
Insolvency
The Jersey government has worked with the Viscount (who is the executive officer of the
court) and the Jersey Law Society to provide guidance and assistance for directors of
Jersey companies in understanding wrongful trading and what directors should be
considering when determining whether and how to carry on trading during these
financially challenging times.
•
Has the
government made
any changes
to insolvency
•
legislation?
Jersey's existing wrongful trading rules (which are more relaxed than the UK) provide that
once a director concludes (or should have concluded) that there was no reasonable
prospect of the company avoiding a declaration of bankruptcy or an insolvent winding up,
the director has a duty to take reasonable steps with a view to minimising the potential loss
to the company's creditors (failing which the director may be made personally liable for
the company's debts). In the UK the equivalent test is that the director must take every step
with a view to minimising the potential loss to the company's creditors.
The Viscount has issued a Guidance Note and the Jersey Law Society has issued a
Practice Statement. Both publications give helpful guidance to the wrongful trading
provisions contained in Jersey legislation. In particular, both publications analyse what
constitutes “reasonable steps” and the Jersey Law Society publication also provides
practical considerations on the bringing of a claim against a director.
•
Contractual
Issues
•
The Jersey government has not introduced any legislative measures to deal
specifically with contractual issues caused by the Covid-19 pandemic. Any
contractual concerns will be dealt with according to Jersey contract law.
What measures
have been taken
to reinforce
contracts?
•
The main contractual provision which governs the enforceability of a contract upon the
existence of an unforeseen event is the force majeure clause. In general terms, the force
majeure clause seeks to list the situations in which the parties to a contract may suspend
or terminate the contractual relationship due to the occurrence of certain events that are
outside the control of the parties.
•
Depending on the construction of the force majeure clause in individual contracts, the
Covid-19 pandemic may cause the contract to be suspended or terminated.
•
It is also possible that in certain situations the occurrence of the Covid-19 pandemic
may have the effect of rendering a contract “frustrated” i.e. the changes in
circumstances caused by the coronavirus pandemic has rendered the obligations
under the contract impossible to perform.
•
Businesses should review their existing contractual relationships and seek legal advice
to ensure they are aware and fully understand their ongoing legal obligations and
identify any areas of uncertainty.
•
Mourant has set out some of the contractual issues that arise from Covid-19 in Jersey.
Property
Have any changes
been made to
the laws around
property, rent and
enforcement?
88
•
Temporary amendments to residential and commercial tenancy legislation were passed
in Jersey. These made provisions to protect both tenants and landlords, taking into
account the possible effects of the Covid-19 pandemic. The regulations expired on 30
September 2020.
•
They included the suspension of variations to tenancy agreements, by way of an increase
in rent in the period up to 1st October 2020, even where the tenancy agreement allowed
for an increase at renewal.
Government measures in key jurisdictions
