Professional Comment

What Will be the Main Legal Concerns for Businesses in the Hospitality Industry Ahead of Reopening?

By Hiren Gandhi, partner at Blaser Mills Law

Following “Super Saturday” which saw a partial opening of the hospitality and on-trade CLH News spoke with Hiren Gandhi, partner at Blaser Mills Law to discuss main legal con- cerns for businesses in the hos- pitality industry as the sector returns to trading?

“The main legal concerns for the hospitality industry upon reopening will be sticking to the strict guidelines that have been introduced by the government to ensure businesses in the sec- tor remain COVID-secure.

“Health and safety is central to any business’ legal duties and it is vital that those returning to trading have a carried out a COVID-specific risk assessment, taking into consideration how

and where the risks of transmission may be a factor and identifying the necessary measures that need to be taken to mitigate those risks.

“It is businesses’ legal duties to ensure they consult their workforces on the health and safety arrangements before they return. In addition, they should provide customers/guests with information on how the business is mitigating the risks, outlining how those visiting the premises must act in accordance.The government has also produced a certificate for businesses to display to demonstrate their compliance.”

• The UK and Scottish governments have released updated guidance for the hospitality sector on the requirements restaurants, pubs and bars need to follow to reopen following the coronavirus lockdown. What are the main updates?

“The government’s 43-page advisory document outlines information about social distancing for workers, cleaning of premises, keeping cus- tomers/guests safe and the use of PPE.

“One of the main updates to the guidance is the call for businesses to help assist the NHS Test and Trace scheme. Businesses in the sector are asked to keep a temporary record of all customers for 21 days, allowing tracers easy access to the contact details if they are needed.

“Although the guidance encourages premises to avoid bar service where possible, it does not forbid customers from ordering at a bar or standing indoors whilst eating and drinking.The guidance states that ideally, table service by a single staff member should be adopted. Businesses are also advised not to encourage the use of PPE or face coverings unless the situa- tion means the risk of COVID-19 transmission is very high.”

• Will the authorities be entitled to shut an establishment that they do not believe is following the government guidance for reopening? “All guidance that is stressed as mandatory can be enforced by law in

England. Every business is required to comply with the regulations issued by the government in order to protect itself and its visitors.

“The Environmental Health and Trading Standards will monitor compli-

ance with regulations and will be supported by the police if needed. Businesses that breach regulations will be subject to prohibition notices and a fixed penalty.”

• What should hospitality businesses do if their employees are anxious about returning to work?
“Many employees will be anxious about returning to work, but it is the

obligation of the employer to make the return as safe and stress-free as possible.

“Employers should brief all staff on the safety measures that have been introduced at the premises.They should also make it clear that they are open to questions and suggestions from those returning to work, to help put employees at ease. It may also be a good idea to discuss each staff member’s circumstances to ensure that their return to work is as safe as it can be.

“Employers should make themselves aware of any members of staff who may be vulnerable or have relatives that fall into this category. Maintaining an open dialogue with employees will not only ease the anxiety upon returning but also allow reopening to run far more smoothly.”

• One of the new measures introduced this week states that if you open a pub, restaurant or other hospitality venue for business you must keep a record of patrons who visit and be ready to help with the national test and trace effort.What are the data protection implications?

“As previously mentioned, the opening up of the hospitality sector is being supported by NHS Test and Trace, and as such the government has asked businesses to assist by keeping a temporary record of customers and visitors for 21 days to help contain clusters or outbreaks.

“Most businesses in the sector that take bookings will already have a sys- tem in place that records contact details for their customers and visitors, which will already be optimised to protect data. However, some may not have this type of system, which poses the risk of data protection implica- tions.

“The government has announced it will work with industry and relevant bodies to design a system in line with data protection legislation, however nothing has been announced yet.This may come as a worry to both busi- nesses and guests as we are very close to the date of reopening.

“There is very little guidance on how businesses should keep data secure and how to dispose of this data after 21 days.This may affect businesses who do not have a pre-existing system in place, as customers may be put off visiting as if data protection cannot be promised.”

• New laws proposed by the government will allow more pubs, restau- rants and cafes to serve customers outside, and will put into effect simpler licensing processes.What are the main legal implications for these businesses to be aware of?

“The new laws proposed mean more pubs, restaurants and cafes will be able to serve customers outdoors and this will reduce the costs of the licensing process for outdoor seating and stalls, making it easier for people to safely drink and dine outside.

“This means pubs and restaurants will be able to use car parks and ter- races such as dining and drinking areas using their existing seating licenses.

“Temporary changes to licensing laws mean many more premises will also be able to sell alcohol for consumption off the premises, allowing cus-

tomers to buy their drinks from a pub and consume them elsewhere, to aid social distancing.

“Some businesses may feel frustration that this change to the law has only been introduced now, as many had already updated their licenses in line with their need to provide outdoor areas before these new simpler and cheaper laws were introduced.”

• What legal implications could a local lockdowns cause on the hospi- tality sector? Will businesses be covered by their BI insurance?
Those in the Hospitality sector have already been badly affected, further

local lockdowns will almost certainly have an even bigger effect on their revenue.With businesses in the hospitality sector set to open on from 4 July 2020, these businesses must comply with the governments restrictions and have had to put in measures to comply.

Before opening up businesses should consider the possibility of a local lockdown and what they would do if it were to happen.They should con- sider:

• The liability of having to repay deposits to customers.
• Cost of preparing for reopening, which although it seems long term as this is

the way we will be dining out now, it could be short lived if there were to be a

local lockdown.
• The ability to furlough staff at short notice, especially as in August employers

will start having to pay a portion of the wage bill.

Many, BI insurance policies covers a business for the loss of income due to an interruption to normal trading, as a result of an external factor that cannot be controlled, such as a fire or flood at the premises. If your cover states that it covers loss of income due to circumstances such as diseases or public closures/restrictions then you should pursue a claim for losses. It is worth nothing that some policies will list the notifiable diseases for which they will pay and as a result of the SARS outbreak in 2002/3 this can often, not always, show as an exclusion. So carefully examining your policy wording is key.

The Financial Conduct Authority (FCA) have started proceedings in the High Court as a test case to seek the clarity of the meaning and effect of BI insurance policy wording in the context of Covid-19.The issues to con- sider are:

• Coverage:Whether the policy wording covers Covid-19 and the proximity of an instance outbreak to the business.

• Causation:The link between the loss suffered by the business and Covid-19.

On 28 June 2020 Secretary of State for Health and Social Care, Matt Hancok announced that due to localised spike in infections the first local lockdown has been imposed in Leicester,

Whether a business will still be covered by their BI insurance under a local lockdown depends on their policy wording.The difference between infection rates in different areas of the UK will now only complicate the causation issue, making it harder for business owners to evidence that their loss was due to Covid-19.

Although the FCA have tried their best to establish clear principles, it is likely that the answer will be taken on a case by case basis, with the focus on the detail in each situation. It is hoped that the FCA test case, set to run for 8 days on 20 July 2020, will bring certainty and clarity for policy holders and insurers.