Real estate, alternative real assets and other diversions

Covid -19: Legal Contagion

The Analyst

The law has been quick to react to the current health emergency. First of course came the Coronavirus Act 2020, given Royal assent and commencing on 25 March 2020. The Act made contained multi-various provisions to deal with the pandemic in England & Wales, from emergency registration of health workers and indemnities for health service activity for staff deployed outside their normal areas of competence, to extra powers relating to food supply chains, from powers to suspend port operations and make directions relating to events, gatherings and premises and in relation to potentially infected persons to provisions expanding the availability of live links in criminal court proceedings. 

In addition and of direct relevance to the property sector, at sections 81 to 83 the Act contains provisions protecting residential tenants from possession claims and business tenants from enforcement of any right of forfeiture for non-payment of rent by action or otherwise during the relevant period (presently defined as the period up to 30 June 2020). The provisions apply also in relation to proceedings already begun and where an order for possession has been made to protect tenants from having to give possession before the end of the relevant period.

Already though some inroads are being made into these provisions, as in the case of UCL Hospitals NHS FT v MB[2020] EWHC 882 where an injunction was sought and granted, not unjustifiably, to exclude a patient from trespassing in hospital accommodation. Contrast though the decision on 15 April 2020 in Arkin (As Fixed Charge Receiver) v Marshall(unreported), in which HHJ Parfitt held that the effect of the recently issue Practice Direction PD51Z was to impose an inescapable 90 day stay on directions in an action for possession (albeit the decision is now subject to appeal).

If these cases and those already arriving on my desk are any indication, expect then a tsunami (per Lord Neuberger, Radio 4, Today 27/4/20) of litigation as parties exploit the provisions of the new legislation or otherwise seek to escape from or conversely assert their property rights and obligations in consequence of the pandemic. Frustration is now regularly being pressed into service to avoid tenancy agreements or leases in whole or in part, along with arguments for and against implied terms to deal with the unforeseen exigencies of the moment (see the observations of Lord Wilberforce at page 11 in National Carriers vPanalpina[1981] AC 675), whilst where terms permit parties are seeking to rely instead upon force majeureto suspend or terminate their obligations.






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