Covid-19: Legislation requiring provision of Premises, Facilities and Services

On 25 March the Coronavirus Act 2020 (“Act”) became law and last week we commented on the provisions for a temporary moratorium on forfeiture of business tenancies for non-payment of rent.

The Act covers a multitude of issues facing the country during the pandemic and soberly includes provisions for the transportation, storage and disposal of dead bodies and human remains (Schedule 28 of the Act).

Included is the ability for the relevant authority to require disclosure of information and to requisition premises, facilities and other things for such purposes (see key provisions below). Failure to comply with either requirement (without reasonable excuse) is a criminal offence. There is no guidance as to what will constitute reasonable excuse.

In exercising its functions, the relevant authority must have regard to the effect on the ability of a person to carry on its normal business. However, unless a business is providing an essential service, then it seems likely that premises, facilities or other services will be at risk of requisitioning if required by the authority.

Importantly, compliance with directions to provide premises, services, facilities etc. can be required regardless of whether this places the person in breach of contract, who will remain liable to any third party for such claims.

However, the Act includes provisions requiring publication of a compensation scheme for persons required to comply with any directions. Though the terms of such scheme remain to be seen, it expressly states it must include a reasonable sum for anything provided, compensation for any losses, liability for damages for breach of contract and any other liabilities. This may provide a token of comfort to those affected in these uncertain times.

Effect on landlords and tenants

• Landlords and tenants can be required to disclose information about premises
• If there is insufficient capacity and exercise of the powers under Schedule 28 will address the problem:

• Landlords can be required to provide vacant premises or premises over which it exercises control
• Landlords will remain liable for its holding costs (though the exception for rates liability should apply where premises are requisitioned) and/or any other contractual commitments, for e.g. under agreements for lease, building leases or other contracts,
• Tenants can be required to provide premises, facilities, equipment etc.
• Tenants will remain liable for rent and other liabilities to landlords
• Landlords and tenants can pursue compensation claims under the compensation scheme in due course

Key provisions

Disclosure of Information

• A local authority may require a person to provide information for the purposes of ascertaining the capacity within its area to deal with transportation, storage or disposal of dead bodies or other human remains (the “Purpose”)
• The request must be in writing and specify:
  • to whom the information should be provided
  • how it is to be provided
  • when it is to be provided

• It is a criminal offence to fail to comply with a request without reasonable excuse or to knowingly or recklessly give false information in response, liable on summary conviction to a fine
• Disclosure of information should not contravene data protection legislation, but this should be determined having regard to the power under the Act
• The local authority (or other person) in receipt of such information can only use or disclose it for the Purpose and it is a criminal offence for it to use/disclose the information for any other purpose

Designation of local authority

• The appropriate national authority (“NA”) (being the Secretary of State or Minister for the Cabinet Office in England and the Welsh Ministers in Wales) can designate a local authority (“DLA”) if it appears to have insufficient capacity for the Purpose and the powers under Schedule 28 are likely to address the problem
• A designation occurs when it is published on line (and as soon as possible after publication must be advertised in the London Gazette (for England & Wales))
• The designation can be revoked by the NA at the relevant time

Directions

• A DLA (or NA) can require a person to do anything calculated to facilitate the Purpose in its area
• This includes (amongst other things):
  • Requiring a person to provide services
  • Requiring a person to provide premises, facilities, vehicles, equipment or anything else within a person’s possession or control
  • Requiring a person to exercise rights it has to require others to do things
• Directions can be given whether or not it will put the person in breach of contract, but the DLA should have regard to the effect on the ability of a person to carry on its normal business
• Liability for claims by third parties for any resulting breach of contract is not affected by the direction but a claim for compensation (see below) can be made
• It is a criminal offence to fail to comply with a direction without reasonable excuse, liable on summary conviction to a fine
• Individuals and public authorities are excluded persons

Compensation

• The NA is to publish a scheme to compensate persons who receive directions which may include provisions for the calculation of claims and any time limits for making a claim
• Compensation will include:
  • a reasonable sum for anything provided
  • compensation for liabilities for (1) loss; (2) liability for damages for breach of contract; and (3) any other liabilities incurred as a result of the direction