Abstract

This briefing summarises the recent BEAT COVID measures announced by Her Majesty’s Government of Gibraltar (‘HMGoG’), which have now been legislated for under the Appropriation (Business Employee Assistance Terms COVID-19) Regulations 2020 (the ‘Regulations’). The legislation comes after guidelines issued on 25 March 2020.

The Chief Minister, acting in his capacity as the Minister with responsibility for finance and in the first exercise of the powers recently conferred on him by s.8(1) Appropriation Act 2019 has been able to make the Regulations after having consulted with the Leader of the Opposition. They follow recently enacted legislation and other parallel regulations made in response to the global pandemic brought about by Coronavirus (‘COVID-19’ or ‘SARS-CoV-2’), designed to protect the elderly population and the general public through a set of lockdown measures.

The relevant “Minister” referred to in the Regulations is the Minister with responsibility for finance (currently the Chief Minister).

The Regulations remain in force until 30 June 2020, unless an earlier Gazette notice announces that the COVID-19 pandemic is over.

Who is entitled?

• The measures cover “Inactive Employees” working for eligible employers (i.e. those not from an Excluded Sector) who cannot work remotely and are not provided with any work by their employer and who are told not to attend their place of work due to the current lockdown restrictions.
• Inactive Employees can either be “full-time” or “part-time”, depending on whether they were registered as such with the Income Tax Office or Department of Employment as at 15 March 2020. Those registered thereafter are ineligible for the BEAT COVID Measures.
• Employees must have been employed for a period of at least 28 days in the period 15 September 2019 to 15 March 2020. The same conditions apply to those that are self-employed.
• Employers who reasonably know that another employer has made or will make an application on behalf of the same employee should not include those employees in an application (i.e. no double-dips).
• Full-time Inactive Employees whose annual income was either declared by them or deemed by Government to be less than £15,000 are treated as part-time Inactive Employees.
• The measures also cover and “Inactive Self-Employed Persons” provided they were registered as such with the Income Tax Office or Department of Employment as at 15 March 2020.

Who is not entitled?

• Businesses and self-employed persons in an Excluded Sector will not be eligible for the measures. All other sectors are considered a “Relevant Sector”.
• Detached workers are ineligible for the measures as are those on sick leave.
• Any Inactive Employees receiving non-employment recurring annual income above £15,000 are also ineligible.
• If an Inactive Employee returns to work then he/she is no longer Inactive.
• Excluded Sectors are listed in Schedule 2 of the Regulations and at the time of writing include those listed below:
  1. Utility providers;
  2. Telecommunications operators and internet service providers;
  3. Data centre providers;
  4. Care workers;
  5. Supermarkets;
  6. Grocers;
  7. Butchers;
  8. Market Stalls;
  9. Wholesalers with a tobacco licence;
  10. Petrol stations;
  11. Food delivery companies;
  12. Online gaming industry and casinos;
  13. Accountancy firms;
  14. Law firms;
  15. Businesses that are licensed by the FSC (including insurance businesses and intermediaries);
  16. Pharmacies;
  17. Health stores;
  18. Bunkering, ship chandlers, sea transport and other shipping businesses;
  19. Property management companies;
  20. Businesses that are predominantly reliant on Government as their main source of income; and
  21. Any other business deemed to be in substantive operation

In exceptional circumstances, persons in the Excluded Sector can apply to HMGoG to be considered as part of the Relevant Sector.

How to apply

• Applications are made online, but employers may be required to sign a hard copy of the application submitted. Applicants can apply as employers or as self-employed persons. Those in employment should not apply on behalf their employer.

How payments will be calculated and made

• Employers from the Relevant Sector who submit complete applications on behalf of their Inactive Employees will receive a “BEAT COVID-19 Contribution” by direct bank transfer before the end of April provided they apply before 21 April 2020. They must give each Inactive Employee their attributable share no later than 3 working days from receipt of the contribution and hold it on trust until they do so. Evidence of a “BEAT COVID-19 Payment” should be retained by the Employer, together with additional information about the application.
• If an Inactive Employee continues to receive part of their salary from their employer, then they are still entitled to a BEAT Payment so long as the employer payment does not exceed their full salary.
• Inactive Self-Employed Persons will receive a “Self-Employed BEAT COVID-19 Payment” by direct bank transfer on similar terms if they apply in good time and are continuing to fulfil conditions of being inactive and having no other sources of income such as a full salary from employment or other recurring income (i.e. not their ordinary self-employed income) in excess of £15,000 per year.
• Schedule 1 provides for the calculations of payments. At the time of writing, the BEAT COVID-19 Contribution for each full-time Inactive Employee for any calendar month is £1,155 (or such lesser sum as HMGoG may determine given the information submitted in the application and historical information available to the Income Tax Office), calculated by multiplying 7.5 hours in a day by 22 working days by the current ‘BEAT COVID-19 Hourly Rate’ of £7.00 per hour.
• For part-time Inactive Employees, the Contribution payable is calculated by considering the average of the normal working hours worked by the relevant part-time Inactive Employee from 2 January 2020 to 15 March 2020 (the ‘Average Hours Per Day’) and then multiplying that by 22 working days by the BEAT COVID-19 Hourly Rate (or such lesser sum as HMGoG may determine given the information submitted in the application and historical information available to the Income Tax Office). To obtain the Average Hours Per Day the total number of hours worked during 2 January 2020 to 15 March 2020 is considered. Provided it is no more than 390 hours, then the hours worked during the period are divided by 390 and multiplied by 7.5 to obtain the Average Hours Per Day.
• For Inactive Self-Employed Persons, the Contribution payable is also £1,155 and calculated in the same manner as for full-time Inactive Employees at the time of writing. This figure is also subject to review by Gazette notice. Inactive Self-Employed Persons may submit more than one application in the same month, but their previous application is deemed to be amended by the latter. Only one payment is allowed per calendar month in any event.

Restrictions on employers

• No bonuses or dividends to shareholders are allowed to be paid by Relevant Sector businesses who receive a BEAT COVID-19 Contribution whilst the Regulations are in force.
• Any termination of employment between 15 March and the time the Regulations are in force shall be void unless consent of the Director of Employment is obtained in writing, on receipt of proof of reasonable cause.

Obligations and rights of eligible persons

• The Inactive Employee retains all employment rights and obligations except the rights to be paid a salary and accrual of holiday and leave entitlement, which may need to be suspended during this period.
• In exchange for payment, any Inactive Employee or Inactive Self-Employed Persons may be required by Government to provide services to Government during this period.

Tax and social insurance

• Tax shall not be chargeable in Gibraltar on any BEAT COVID-19 payments made to an Inactive Employee or Inactive Self-Employed Person.
• No social insurance shall be payable in Gibraltar by an Inactive Employee, their employer or an Inactive Self-Employed Persons for as long as the Inactive Employee or Inactive Self-Employed Person remains inactive. However, an Inactive Employee and an Inactive Self-Employed Person shall be deemed to have made all their respective social insurance contributions for such part that they remain inactivate.
• Any BEAT COVID-19 payments made by an employer to an Inactive Employee shall not be included in that Inactive Employee’s employer annual statement to the Income Tax Office (P8 Form).
• Whilst it is currently uncertain how an Inactive Employee or an Inactive Self-Employed Person should declare any BEAT COVID-19 payments (if at all) on their tax returns, we would expect further clarity on this by HMGoG in the coming months.

Offences, anti-abuse provisions and issues with payments

• Criminal offences are included to dissuade non-compliance or any abuse that is intentional or reckless, including providing false, inaccurate or misleading information. The offence is an either-way offence, which means it can be tried summarily in the Magistrates’ Court or on indictment in the Supreme Court, with potential imprisonment for up to 7 years and an unlimited fine in the latter court. A corporate offence is also included where a benefit is received by a corporate body which it would otherwise not be entitled to under the Regulations.
• Additionally, a civil offence has been included which could lead to having to pay Government back up to three times the amount of BEAT COVID-19 Contributions received or applied for during this period, plus paying back the contribution(s) as a civil debt.
• Anti-abuse provisions are provided for by way of notification obligations on both employers and Inactive Employees for issues including, but not limited to, overpayments, returning to work, receipts of non-employment recurring income, or having more than one employer. Further exclusions are provided for any Inactive Employees that continue to provide any services to their employer.
• Any employer who has attempted where possible but cannot make a payment to one or more Inactive Employees must return the Contribution to Government within 14 days of receipt and inform the Inactive Employee of the reasons for not being able to make the payment.
• The burden for erroneous payments lies with the employer who needs to repay this to Government unless they have reasonable cause, and also need to report erroneous payments received.

Other considerations

• The current lockdown measures under the Civil Contingencies Act 2007 do not apply to employers’ access to the workplace in order to access information and submit applications, as well as carry out essential payroll/BEAT COVID-19 Payment tasks and deal with outstanding invoices.
• Insolvency proceedings, voluntary winding up and schemes of arrangement commenced by or against employers are also regulated so that relevant priority is given to unpaid payments and civil debts created under the Regulations as preferential debts.
• Data sharing provisions are included to ensure Government can freely share BEAT COVID application data collected or generated with relevant tax, social insurance and other appropriate authorities within Gibraltar or in the country of residence of each Inactive Employee or Inactive Self-Employed Person in respect of whom an application is made. Consent is deemed as a lawful basis for this sharing of information and consent is deemed obtained upon receipt of payment. In addition, Government may demand banking institutions or tax authorities to confirm whether such persons are in receipt of other non-employment recurring annual income in excess of £15,000.
• A BEAT-COVID-19 Appeals Board has been established to hear and determine appeals under the Regulations, which includes the Financial Secretary as its chairman as well as government officers. Appeals may be made on the basis of:
  • Refusal of all or part of a BEAT-COVID Contribution
  • Failures by employers of Inactive Employees to make a valid application or to make a BEAT COVID-19 payment.
  • Any employer, Inactive Employee or Inactive Self-Employed Person being dissatisfied with the calculation or any relevant contribution or payment.

A further opportunity to appeal to the Magistrates’ Court is also provided for in the event the appellant is dissatisfied with a determination by the Board.

• A “name and shame” provision has been included within the Regulations to allow persons who fail to comply with them to be named in the Gazette, and have further details published about them such as the business address and any other information as the Director of Employment considers appropriate to publish in order make clear that person’s identity. To prevent errors and potential defamation actions by those named, the Director of Employment can publish retractions as necessary.

Here to help

If you are an employer, employee or a self-employed person who has been affected by the lockdown measures and consider you may be eligible for the BEAT COVID scheme, ISOLAS is on hand to assist with applications, appeals or any general queries you may have.

Please contact Samantha Grimes on samantha.grimes@isolas.gi or Stuart Dalmedo on stuart.dalmedo@isolas.gi or Michael Adamberry on michael.adamberry@isolas.gi

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The Coronavirus (COVID-19 or SARS-CoV-2) pandemic has resulted in unprecedented challenges worldwide. Amongst these, businesses are finding it difficult to reconcile the need to share information quickly and effectively with their obligations under relevant data protection legislation.

ISOLAS LLP Partner, James Montado, and Associate, Michael Adamberry, who amongst a wide range of practice areas specialise in Privacy & Data Protection, and Banking & Regulatory Services, comment on some of the key considerations for businesses during these challenging times.  

A perfect storm 

As the rate of the spread of COVID-19 increases exponentially, Europe now finds itself at the epicentre of the pandemic. Governments are looking to ensure business continuity, whilst having to engage emergency lockdown protocols for their citizens. Last week, ISOLAS commented on how Majesty’s Government of Gibraltar (HMGoG) had implemented a set of immediate economic measures to allow Gibraltar’s economy to weather the storm ahead, with further measures announced by the Chief Minister this week.

Some businesses, practically overnight, have had to adjust to the emergency legislation, which although focused around preventing long-term damage to the Gibraltar economy, has led to some businesses having to temporarily suspend business altogether, whilst others resort to remote working, or working telematically  (i.e. merging telecommunications and infomatics, resulting in telematics).  

No Data Protection considerations left behind 

As businesses adapt to the new normal, new challenges arise for those that are not accustomed to remote working; from sourcing suitable equipment to staff training, to employment and HR issues. Some may be tempted to shift the priority of ensuring adequate data protection downward on the list of business concerns as they focus on how to keep their business afloat in the midst of the rapidly developing socio-economic crisis.

As financial and human resources are diverted away from regulatory compliance and information governance work, this creates an inevitable risk of potential regulatory action. However, provided that organisations can reasonably justify the need to prioritise other areas, and that they do not completely forget about Privacy & Data Protection, various regulators, such as the Gibraltar Regulatory Authority (GRA) have signified that a more lenient approach will be taken, penalising only those that have a flagrant disregard for their legal and regulatory obligations, or those who take no steps at all to at least try and address these.

 Some key questions and answers  

The Gibraltar Regulatory Authority (GRA) has released guidance on what businesses need to know. The UK’s Information Commissioner’s Office (ICO), which is respected as one of the leading supervisory authorities worldwide has also commented on the recent outbreak in its newsletter. Some of the key points raised are as follows:

• What if some deadlines are missed due to lack of resources?: Acceptable, provided the business can justify how resources are being diverted and mitigate the damage (i.e. send holding replies).

• Does remote working breach data protection legislation?: Not necessarily. Provided the business has adequate data security and ensures the right technical and organisational requirements are in place, it should allow home working. The organisation should avoid, as far as possible reliance on employee’s personal equipment, and this should be limited as far as possible or if absolutely necessary, further steps should be taken to ensure that.  

• Can I inform my staff that a person has contracted COVID-19?: Yes, but within limits. So long as there is a justifiable purpose to disclosure, this will generally be seen as acceptable. If the intention is protection the other workers (e.g. sending vulnerable people home), the organisation may be able to justify its action. Organisations still need to think about whether they can achieve this aim by disclosing the minimal amount of data possible. For example, do you really need to name them? Can you identify instead what part of the building/department is expected to have been affected? Consider that knowing that an employee has contracted COVID-19 can lead to a considerable stigmatisation and have an adverse effect on the fundamental rights and freedoms of natural persons. Further, consider that in smaller organisations, individuals may be readily identified even if they are not named and the importance of having a valid justification for the disclosure will be paramount.  

• Asking employees about high-risk areas & contact with infected persons: Acceptable, but as the pandemic spreads, this could just be anywhere outside the home or remote working environment. In such cases, employers cannot monitor every movement of the employees, but can periodically request confirmation that they have not allowed themselves to be exposed to the virus (not necessarily needing to confirm whom the infected individuals are).  

• Entry restrictions and temperature checks: Acceptable to an extent, given this involves special category data, there needs to be a prevention of abuse, and the least invasive measures should be considered (e.g. non-invasive temperature taking, rather than subjecting everyone to medical examination). The justification is as above; ensuring health and safety in the workplace. You do not need to gather lots of information about employees or visitors to your premises, but if checks do reveal an issue, the organisation needs to think about how it will manage this, and how it will secure this information, which should be much more restricted than other non-sensitive data.  

• Sharing information outside my organisation: Acceptable to an extent, as you always need a valid reason to share personal data. Confirmation that someone has contracted COVID-19 is GDPR Art.9 special category data relating to health, and therefore you need a lawful basis under GDPR Art 6. plus another lawful basis in GDPR Art 9, and then consider whether certain tests (e.g. the health data test) contained in the Data Protection Act 2004 apply. You also need to consider who you are disclosing to. Some cases are more clear cut, such as requests from competent authorities, where employer has to transmit information to such authorities in accordance with statutory obligations. Other cases may require you to question that authority, and this underpins the need to ensure a request is legitimate and has appropriate statutory/regulatory footing or other official authority.  

• Can I collect private mobile phone numbers / use Facebook?: Yes, but within limits. You may want to warn employees at short notice as to office closures, infection, breaches of security etc. However, consider whether you will rely on consent (GDPR Art.6(1)(a)) or on “legitimate interests” (GDPR Art.6(1)(e)) as your lawful basis and to what extent you can justify this. Is it also possible to reduce communications or find an alternative method or communicating that does not reveal personal numbers?  

Other employer considerations:  

Given an employer’s duty of care towards other employees, and to ensure the occupational safety and health of their employees, this “employment, social security and social protection” justification (GDPR Art.9(2)(b)) could provide sufficient justification in many of the above cases. The next weeks and months will also likely see an increase in the reliance of “vital interests” (GDPR Art.6(1)(d)) as a lawful basis, together with other justifications such as “preventative and occupational medicine”  (GDPR Art. 9(2)(h)) and “public health” (GDPR Art.9(2)(i)).  

James Montado said: “As signalled by both the GRA and ICO, the top line here is a recognition of the importance of allowing information to flow rapidly and to slow down the spread of this virus. Data protection laws should not stop businesses from doing that, and are designed not to hinder information flow, but to ensure that valid justifications are considered. Common sense should always prevail, and there may be legitimate and proportionate aims pursued by data controllers that outweigh the fundamental rights and freedoms of natural persons- but let’s take some time to think about what those are and how we can document these assessments.”

If you would like any further information on your Privacy & Data Protection obligations, or would like ISOLAS to conduct an independent audit of your policies and procedures.

Please contact James Montado on james.montado@isolas.gi or Michael Adamberry on michael.adamberry@isolas.gi.

Since the precautionary lockdown measures were announced by Her Majesty’s Government of Gibraltar recently, many clients have asked what this will mean in relation to their property matters.

Although movement and travel are restricted and should be as limited as possible, there have been no official restrictions on property completions. There are ways to continue property transactions within the new guidelines, to provide solutions for our valued clients at this time. These are set out below: 

1. If you live abroad or live in Gibraltar but are in the high-risk category, you may want to consider putting a Power of Attorney in place with your lawyer. This document allows someone in Gibraltar or your lawyer to be able to sign the relevant documentation on your behalf;

2. If you are purchasing an off-plan project in the early stages, the timing of building works may not necessarily be affected at this time. Many developments are being allowed to continue for the moment, on the basis that the workers on site are based in Gibraltar (i.e., do not need to cross the border to work) and exercise adequate social distancing when at work;

3. If you are purchasing a resale or an off-plan project in the late stages, as things stand at the date of this article, completions are still proceeding as usual;

4. Although certain sectors (such as retail, bars, restaurants) are now closed or quite limited in their trade, law firms are continuing almost as normal, with most employees working remotely either from home or at work with appropriate social distancing;

5. Bank valuations should not be interrupted, especially where the property to be valued is vacant. The surveyor can collect the keys from the relevant estate agent, view the property and drop back the keys once finished. The report to the bank will then follow by email;

6. Banks are now aware that most customers cannot attend their branch in order to effect completion transfers, so they are allowing online forms to be completed at home and sent to their relationship managers;

7. On completion, keys can still be collected from our offices at ISOLAS LLP, where we have a designated collection and drop-off area with sanitiser; and

8. Post-completion water and electricity connections are now handled online with AquaGib and Gibelec.

If you would like any more information in relation to the above, please contact Sarah Miles at sarah.miles@isolas.gi  or the ISOLAS LLP property team on info@isolas.gi . Please note the above is subject to change following further precautionary measures which may be implemented in future and/or further guidance by HM’s Government of Gibraltar.

Is COVID-19 a force majeure event?

As the COVID-19 pandemic spreads, its implications on the economy are beginning to become more readily apparent. One such implication is the potential that previously agreed contracts may no longer be performed through no fault of either party. In such cases, we have seen an increasing number of enquires as to whether parties may be able to rely on force majeure clauses to mitigate the negative effects of the pandemic on businesses.

ISOLAS LLP Senior Associate Danielle Victor has written a full briefing on the impact the COVID-19 pandemic might have on the performance of contracts as a whole and whether the commonly used force majeure clause can be utilised during this unprecedented time of sudden change.

What is force majeure?

In short, force majeure clauses are contractual clauses which allow parties to vary their obligations and/or liabilities under a contract – and in extreme cases even terminate them – when extraordinary events or circumstances beyond the control of the parties prevents the impacted party from performing the contract.

Given that these clauses are purely contractual, it means that there is no common law protection in such circumstances, nor can such protection be implied, should a contract exclude the clause. In cases where the contract does not provide for force majeure, a party may seek to rely on the doctrine of frustration instead (explained further below).

There is no “correct” or standard definition of force majeure. In the circumstances, clauses vary greatly and how they are drafted will have a crucial impact on whether they will afford parties the protection they are seeking in these unforeseen circumstances. As an example, a force majeure clause may look something like this:

“Neither party shall be in breach of this agreement nor liable for delay in performing, or failure to perform, any of its obligations under this agreement if such delay or failure result from events, circumstances or causes beyond its reasonable control. In such circumstances [the time for performance shall be extended by a period equivalent to the period during which performance of the obligation has been delayed or failed to be performed OR the affected party shall be entitled to a reasonable extension of the time for performing such obligations]. If the period of delay or non-performance continues for [NUMBER] [weeks months], the party not affected may terminate this agreement by giving [NUMBER] [days’] written notice to the affected party.”

Further, force majeure will usually be defined in the contract and can vary greatly in the types of events included. The most common examples of force majeure events are acts of God (examples are often included such as floods, drought, earthquakes or other natural disasters), terrorist attacks, wars, collapse of buildings, fire, explosions accident etc.

In most cases, the definition is “without limitation” which allows more flexibility to imply a force majeure event than in cases where the events listed are limited. However, there may be good reason why parties may want to limit force majeure events to those that can be anticipated to impact performance of the specific contact and, accordingly, restrict parties using force majeure as a means to excuse performance where it may be considered unjustified.

Force majeure clauses can have a range of consequences. These include:

• Excusing the affected party from performing the contract in whole or in part;
• Excusing that party from delay in performance, entitling them to suspend or claim an extension of time for performance;
• Or giving that party a right to terminate.

Can the COVID-19 pandemic be considered force majeure?

In itself, COVID-19 should not be used by a party to any contract to excuse its obligations to the other party. However, how the pandemic impacts specific areas as a result of the contingency measures put in place – for example, business closures or restrictions on movement – may be determinative as to whether a party may be restricted or prohibited altogether from being in a position to fulfil its obligations under a contract.

Accordingly, whether a particular “event” or “circumstance” constitutes force majeure will depend entirely on the circumstances of each individual case. In each case, consideration should be given to the obligations themselves, what impact, if any, the pandemic and the consequential measures put in place as a result of the pandemic might have on those obligations and, crucially, to the definition and terms of the specific force majeure clause.

In recent years, “epidemics and pandemics” are increasingly being included as express examples within the definition of a force majeure event in contracts. Another common example of such events are “laws or action taken by government” and as such, the Civil Contingencies Emergency (Coronavirus) (Health Protection Measures) Regulations 2020 – which include limitation of movement and trade as a direct result of the pandemic – may be construed as a relevant event, even if a contract does not make express provision for an epidemic or pandemic.

In cases where the relevant event is not specifically mentioned in the contract, it will be a question of interpretation of the force majeure clause as to whether the parties intended such an event to be covered. For instance, if the definition of a relevant event is limited or exclusive to those events listed, it might be difficult to argue that the list was non-exhaustive and that this event should be impliedly considered a force majeure event.

What if the COVID-19 pandemic makes performance is more expensive or difficult?

There may be cases in which the alternative method by which performance of a contract may be possible, is substantially more expensive or difficult than previously – the simplest example of this is delivery of goods which might be affected by certain restrictions of movement and an alternative route or delivery method is required. In such cases, reliance on the clause will once again depend on the wording of it.

Clauses which deal with “delays” or “non-performance” as a result of “events beyond the parties’ control” may be interpreted more broadly than, for example, clauses which only provide relief where performance is “prevented”. In the case of the latter, it may not be sufficient to rely on force majeure if performance is still possible but more expensive or difficult as performance is still possible – just more expensive. In such cases, it is likely that a party will still be required to perform at the higher cost. Of course, there will be exceptions and every case will be interpreted according to the individual circumstances, performance criteria, means of the business etc.

What if the contract does not provide for force majeure?

Given that force majeure is a creature of contractual creation rather than a rule of law, parties facing difficulty performing their obligations under a contract that does not provide for force majeure, should look to their contracts to determine whether the contract provides for other provisions of contractual relief, and if all else fails, the doctrine of frustration.

It is usually very difficult to prove that a contract has been frustrated given the stringent test imposed by the doctrine and as such, frustration should be considered as a last resort.

A contract may be discharged on the ground of frustration when something occurs after the formation of the contract which renders it physically or commercially impossible or illegal to fulfil the contract, or transforms the obligation to perform into a radically different obligation from that undertaken at the moment of entry into the contract.

As discussed above in relation to the force majeure, it may not be enough to argue that the pandemic in itself is an event to render performance impossible or to make it so radically different – a higher cost as a result of the pandemic will clearly not be sufficient in the case of frustration. However, the restrictions imposed, and most notably, the closure of certain businesses are likely to impact various contracts so a as to render at least some of the obligations under them, physically impossible.

Affected parties should, however, approach the issue of frustrating their contracts with caution since its affect is to terminate the contract in its entirety immediately and does not provide such flexibility in terms of, for example, affording a party more time to comply with its obligations.

Procedure steps for affected businesses/parties

• Evaluate the impact of the COVID-19 pandemic on your business and existing contractual obligations.
• If you consider your business will be affected, inform your contract partners as soon as possible, preferably in writing and always observing the notice provisions of the contract.
• Consider adopting reasonable measures to mitigate delays and losses.
• Where relevant, collect evidence on the occurrence of the force majeure event, adopted mitigation measures, incurred own losses, notice provided etc.
• Evaluate the possible consequences of the force majeure event on your business and what consequences are likely – e.g. termination of the contract or variation of the contract with regard to deadlines and delivery dates, etc.
• Discuss and negotiate with your contract partner on how best to proceed.

Executive Summary

There is no doubt that our current circumstances are unprecedented and that, accordingly, unprecedented measures are being taken which are indisputably causing many unforeseen and unavoidable difficulties for many parties to contracts. That said, it is important that parties recognise that they must prove that they are unable to perform their obligations on time or at all as a direct result of the pandemic (or the measures put in place as a result of the pandemic) in order to avail themselves of the protection of a force majeure clause. Accordingly, parties should be looking at alternative methods and means by which they may be able to meet their obligations and where no alternatives are possible, explore ways to mitigate a losses or damage.

In the above circumstances, it is likely that given the extent of the difficulties being faced by many, the COVID-19 pandemic may well qualify as a force majeure event in many cases and for those contracts not including a force majeure clause, frustration of the contract a real possibility.

If you think your business’s contractual obligations to third parties might be affected by the events surrounding the COVID-19 pandemic and would like to discuss the possibility of relying on a force majeure clause or in absence of one, frustration, please contact Samantha Grimes, James Montado or Danielle Victor on Samantha.grimes@isolas.gi, James.montado@isolas.gi and Danielle.victor@isolas.gi respectively.

Disclaimer: Please note that the information and any commentary on the law or otherwise contained in this article is only intended as a general statement and is provided for information purposes and not for the purposes of providing legal advice. No action should be taken in reliance on it without specific legal advice. Every reasonable effort is made to make the information and commentary accurate and up to date, but no responsibility for its accuracy and correctness, or for any consequence of relying on it, is assumed by the author and/or ISOLAS LLP.

In today’s press conference the Chief Minister announced a further set of support measures falling into three areas:

(1) Assistance paid to employers for the benefit of employees.

(2) General assistance to business.

(3) Protection of citizens

Assistance paid to employers for the benefit of employees. 

HMGoG announced the creation of ‘BEAT’ or  ‘Business and Employee Assistance Terms’, the aim of which is to help affected business sectors help their employees by way of HMGoG providing direct financial assistance. BEAT will apply to all sectors, save for those “excluded sectors” which are at this time: Gaming and Financial Services firms (including law firms), grocery stores, pharmacies and their suppliers. A list of excluded sectors will be published by HMGoG shortly.

The BEAT measures apply to anybody who is a registered employee of a Gibraltar business regardless of the nationality or residency of the employee. These measures apply to those employees who are employed:

• full-time (7.5 hours or more);
• part-time;
• or on zero hours contracts; and
• on a self-employed basis.

The measures will see the creation of a new status in law: the “inactive” employee.

To access this financial assistance, which will be initially available for the month of April, and potentially further months going forward, the business or self-employed individual needs to complete, at the earliest opportunity, the appropriate online form and by providing the information requested. The forms will be made available online (https://www.gibraltar.gov.gi/), with announcements to follow via HMGoG’s social media platforms.

Any terminations of employment registered by companies from 15 March 2020 onwards will be regarded as invalid unless the Director of Employment has authorised the termination.

BEAT will provide for HMGoG to make the initial payment for the benefit of all inactive employees in the last week of April, and monthly thereafter until the measures are reviewed. Businesses are expected to meet salaries for the month of March.

Payments will be made directly from HMGoG to employers (including the self-employed inactive workers, who will be paid directly). Employers must pass the full amount on to those individual inactive employees without any deductions. The amount of the payment, certainly for April, is £1,155.00, which is a net amount (i.e. tax free) for a full time employee who ordinarily works 7.5 hours per day or more. The payment will be adjusted for part-time employees and those on zero hours contracts dependent upon the average hours worked in the period from 1 January 2020 to 15 March 2020, where a pro rated amount will be paid at the end of April to all relevant employers.

Employers and employees are expected not to abuse the measures and to report where an inactive employee status changes.

Business will be granted access to business premises for the purpose of locating relevant information to enable claims to be made and to run payrolls etc.  

General assistance to business 

Measures announced last week in relation to the previously “affected businesses” in the hospitality, leisure, distributive and catering sectors now apply to all sectors, except for those “excluded sectors” as published by HMGoG. Businesses will only be able to claim this direct financial assistance for those employees who are registered as ‘inactive’ due to a downturn in business. The assistance is not available for employees who are able to work from home. In relation to the self-employed, inactive means those whose income has been affected by the lockdown measures and who are confined to their homes and unable to work remotely.

The Chief Minister reminded the public of the measures announced last week in relation to affected businesses, which are now extended to all sectors. You can refer to ISOLAS summary of these measures here.

In addition, some adjustments and further measures were announced:

• Deferral of PAYE and social insurance contributions for 12 weeks for all sectors, revised from the previously announced 10 weeks.
• Social insurance for month of April deemed paid.
• Gaming and Finance Services regulatory fees to be paid quarterly in arrears (i.e. at the end of the quarter) and not in advance.
• Gaming duty deferred.
• New capital allowance of £50,000 for corporation tax deductions in this year to assist additional cost of setting up home working and additional costs.
• Rates for Q2 waived for all  

Protection of citizens

• Price control measures to be introduced to curb any profiteering from increases in prices of goods. Maximum of 10% increase on price from 15^th March, or 20% over importation costs, with up financial penalties of up to £5000 imposed in order to prevent abuse.
• Legislation will be introduced aimed at:
  • restricting video recording and photography at GHA premises, in order to prevent these circulating on social media; and
  • preventing landlords evicting tenants for non-payment of rents during this period.
• HMGoG is also asking for management companies and estate agents to consider relief from service charges where possible during this period.
• Regardless of the measures introduced, those who can afford to pay their mortgage or rent, as well as other outgoings are strongly encouraged to do so, in order that those less able can take advantage of the measures and in order that assistance by HMGoG may be provided for as long as possible, and in order to “preserve Gibraltar’s firepower”.

The costs of the measures, which were noted by the Chief Minister as a “shield around our working people”, are expected to be in the region of £10 to £30 million and HMGoG will consider borrowing capital at 40% of GDP ratio to provide up to half a billion if need be, but wishes to avoid this where possible. It is therefore important for persons not to abuse the measures and HMGoG will seek to prosecute those that do to the full extent of the law.

A special COVID-19 fund is being allocated in order that HMGoG can assess the cost of the crisis and how Gibraltar is going to pay for it.

Talks with the UK in respect of any assistance they can provide are ongoing, with sovereign borrowing preferential rates available to the UK that would otherwise not be available to Gibraltar, as well as the possibility of the UK acting as guarantor for Gibraltar on its sovereign borrowing commitments being explored.

How do the measures affect our citizens and our workers?

Chief Minister Fabian Picardo gave an emergency address to the public on Sunday 22 March amid concerns in relation to the COVID-19 outbreak, with subsequent legislation released today by Her Majesty’s Government of Gibraltar (HMGoG).

HMGoG announced further lockdown measures effective as of midnight tonight, and additional contingency measures for the protection of persons directly affected by these from an employment context.

This follows from our 18th March summary of the previous news of the immediate economic measures to allow Gibraltar’s economy to weather the storm ahead, as well as coverage by ISOLAS on its LinkedIn page.

Legislation has been published focusing on the “lockdown” measures, which includes several exemptions. ISOLAS has prepared further information on how the exemptions work in practice, and highlights the key changes to the Gibraltar legislative landscape, hoping to provide some clarity in these uncertain times.

ISOLAS LLP Partner Samantha Grimes, who, among her wide range of practice areas, specialises in Employment and Immigration, Senior Associate Stuart Dalmedo, who specialises in Tax in Gibraltar, Financial Services and Private Clients, and Associate, Michael Adamberry, who specialises in Banking & Regulatory Services, AML and Data Protection, comment on the further measures that have been introduced today, and how it impacts on free movement of workers and citizens.

What’s the latest – where are we?

Things are moving tremendously fast, in order to keep up with the spread of the virus. Legislation released today notes that at the time of publication there are more than 266,000 confirmed cases globally and more than 11,000 people have died; Coronavirus has, to date, reached 188 countries, areas or territories. The Government of Gibraltar is therefore taking extraordinary but necessary measures to protect its citizens. Below we track the latest developments in date order.

Civil Contingencies Emergency (Coronavirus) (Health Protection Measures) Regulations 2020 (the “over 70s Regulations”)

17 March 2020 – Last week saw the introduction of measures concerning the protection of persons aged 70 and older who, on medical advice, are considered to be a class of persons particularly vulnerable to Coronavirus. The Civil Contingencies Emergency (Coronavirus) (Health Protection Measures) Regulations 2020, enacted on 17 March 2020 prohibit persons aged 70 and over (“P”) from leaving their premises except for the following limited purposes:

(a) to purchase food, beverages, pharmaceutical products or such other essential items;
(b) to attend a medical or care facility of any kind and howsoever described or an essential services provider, for accessing services provided therein;
(c) if they are in employment or self-employed, to go to their place of work;
(d) to provide care to a person where P is the carer of a person with a disability or who is a vulnerable person;
(e) to go to a bank or other financial institution;
(f) to exercise a dog outdoors provided that P is during that time not accompanied by any other person;
(g) the exercise of any ministerial or parliamentary duties;
(h) any case where P is at risk of injury or death; or
(i) any other activity that is absolutely necessary.

Failure to comply attracts a civil penalty of £250 (which can be appealed in the Magistrates’ Court), but it a more serious offence is also created for failure to comply with a direction by a police officer to a person aged over 70 to return to their place of residence, which exposes a person on summary conviction in the Magistrates’ Court to imprisonment for up to 12 months or to the statutory maximum fine (currently £10,000, being Level 5 on the standard scale).

We have underlined and highlighted certain exemptions above, as these are no longer available in certain cases, due to amendments made to this piece of legislation as of today (see below).

Immediate economic measures

18 March 2020 – Previously, we summarised the immediate economic measures, which remain available on the News section of our website. These concerned measures applicable to the “affected businesses” in the Hospitality, Leisure, Distributive and Catering Sectors. Click on the above link or visit www.gibraltarlawyers.com for more information.

We continue to watch this space with regard to the publishing of legislation detailing these measures.

Amendment to Appropriation Act

20 March 2020 – Parliament unanimously passed a bill which amends the Appropriation Act 2019 in order to extend the financial year by six months in light of the public health emergency which Gibraltar is facing. This amendment will ensure compliance with the provision of section 67 of the Gibraltar Constitution and the Public Finance (Control & Audit) Act. This will, in effect, extend the financial year 2019/202020 from 31st March 2020 to 30th September 2020.

The financial year may be extended beyond that in future and Parliament signalled it could be extended to up to 24 months. The Chief Minister also announced a new s.8 of the Appropriation Act to be added, which will enable the Government to table emergency budget measures for business and to implement more measures as necessary by amending regulations and legislation as may be required to provide the necessary relief to businesses as this COVID 19 pandemic progresses.

Further measures on restriction of movement

22 and 23 March 2020 – The Chief Minister gave an emergency address to the public on Sunday 22 March, extending the measures aimed at the over 70 population, to the entire population, citing that this would, in effect, place parts of the Gibraltar economy into “an induced coma”. This morning, three key pieces of legislation have been introduced:

• Civil Contingencies Emergency (Coronavirus) (Catering and Other Establishments) (Amendment) Regulations 2020 (L.N.124/20)
• Civil Contingencies Emergency (Coronavirus) (Health Protection Measures No.2) Regulations 2020 (L.N. 125/20)
• Civil Contingencies Emergency (Coronavirus) (Health Protection Measures) (Amendment ) Regulations 2020 (L.N. 126/20)

Civil Contingencies Emergency (Coronavirus) (Health Protection Measures) (Amendment) Regulations 2020

It is important to note that “pet” has been replaced with “dog” by enactment of the Civil Contingencies Emergency (Coronavirus) (Health Protection Measures) (Amendment) Regulations 2020. This means you cannot go outside to exercise any animal other than a dog.

Further, these Regulations also ensure that ensure that certain exemptions from the requirement to stay at home are not available where a person is infected or self-isolating or a member of the household who is aged 70 years or over.

For the avoidance of doubt, where you are (i) infected with COVID-19, (ii) self-isolating or (iii) over 70 and in a household with persons under 70, then you may only leave the house in three scenarios from the above list – scenarios (b), (h) and (i):

(b) to attend a medical or care facility of any kind and howsoever described or an essential services provider, for accessing services provided therein;
(h) any case where you are at risk of injury or death
(i) any other activity that is absolutely necessary

Civil Contingencies Emergency (Coronavirus) (Health Protection Measures No.2) Regulations 2020

These Regulations limit the movement of all persons in a largely similar manner as the “over70s Regulations” noted above.

Essentially, similar measures now apply to all persons, who are prevented from leaving their premises except for the following limited purposes, which are wider than the over 70s Regulations cited above:

(a) to purchase food, beverages, pharmaceutical products or such other essential items;
(b) to take food, beverages, pharmaceutical products or such other essential items to a person over the age of 60 or to a person referred to in regulation 5;
(c) to attend a medical or care facility of any kind and howsoever described or an essential services provider, for accessing services provided therein;
(d) if P is in employment or self-employed or is the holder of a public office, to go to work;
(e) if P is a member of an essential service, to report to duty;
(f) to provide care to a person where P is the carer of a person with a disability or who is a vulnerable person;
(g) to go to a bank or other financial institution;
(h) to exercise a dog outdoors;
(i) the exercise of any ministerial or parliamentary duties;
(j) where P is a public servant and is acting under the instructions of the Chief Secretary;
(k) where P is a volunteer and is acting under the instructions of the Civil Contingencies Coordinator or the Director of Public Health;
(l) any case where P is at risk of injury or death;
(m) to exercise;
(n) to exercise children, accompanying them as a parent or guardian;
(o) where P is a non-resident parent, to pick up a child from, or go back to, the child’s residence;
(p) taking a child to an official activity, a childcare facility (other than at a school whether at a private residential place or otherwise) or a school and returning from that activity or place, provided that in the case of a school the child falls within the category of children for whom the facility is available;
(q) to travel by vessel or car;
(r) to travel to or from the frontier, airport or port in order to enter into or depart from Gibraltar;
(s) where required to go to court, to file any court documents or for purposes relating to it;
(t) if P is employed or self-employed in the written or audio-visual media, to go to work;
(u) for such other purpose as may be notified by the Minister by notice in the Gazette;
(v) any other activity that is absolutely necessary.

Points (a), (b), (c), (f), (g), (n), (o), (p) and (r) above only apply if you either go out alone or are accompanied by no more than one other person and any children in the household, provided that each person practises social distancing from other persons not from the same household. We have again highlighted the provisions for ease of reference, which are now two-person activities (plus children).

Points (h), (m) and (q) above only apply if you either go out alone or are accompanied by no more than three other persons from the same household. In other words walking dogs, exercising, and travelling by car/vessels is restricted to a four person activity per household (unless exercising children, where all of these can be exercised), provided that social distancing is respected.

Failure to comply with these Regulations exposes a person on summary conviction in the Magistrates’ Court to the statutory maximum fine (currently £10,000, being Level 5 on the standard scale), but not imprisonment, unlike the over 70s Regulations where imprisonment is possible for failing to comply with directions given by a police officer.

In a similar manner to the over 70s Regulations, where you are (i) diagnosed as having COVID-19, (ii) self-isolating on advice from GHA or the Director of Public Health or (iii) in a household with a such persons, then you may only leave the house in three scenarios from the above list – scenarios (c), (l) and (v):

(c) to attend a medical or care facility of any kind and howsoever described or an essential services provider, for accessing services provided therein
(l) any case where the diagnosed person/self-isolating person is at risk of injury or death
(v) any other activity that is absolutely necessary

The Police have also been given wider powers to require persons to answer questions when found outdoors, to direct them to return to their residence or to detain such persons and convey them to their residence.

These Regulations expire on the 23rd April 2020 or such earlier date as the Minister deems to
be appropriate.

Civil Contingencies Emergency (Coronavirus) (Catering and Other Establishments) (Amendment) Regulations 2020

The effect of these regulations is to extend the closure of establishments to include gymnasiums and retail shops, with some exceptions including supermarkets and grocery stores, petrol stations, port and bunkering services, and wholesalers providing supplies to these exempted persons/establishments .

The legislation also provides for the general closure of all construction sites as well as sites used for shipbuilding or repair. It is an offence to contravene the provisions of these Regulations and the penalty on conviction is a fine up to level 5 (currently £10,000) on the standard scale.

It is important to note that “gymnasiums” has been widely drafted to include any gym that is open to any member of the public whether on the payment of a fee or otherwise, or accessible to members, whether or not accessible to the public.

Other announcements made by the Chief Minister

In summary, some additional key points raised by the Chief Minister were as follows:

• Employers to be able to suspend or pause employment (a system which exists in Spain) without employees losing their employment rights for a period of time to be agreed by the parties or as set down by the Chief Minister following which period, the employees would be reengaged. HMGoG also intend to create wage support measures for businesses although the exact details still need to finalised. Any such support would be based upon the minimum wage. Certain types of businesses will be generally excluded from this support measure such as law firms and financial service companies at least for the month of April. Wage support is to apply to self-employed persons also. The HMGoG’s key message here is that it is intended that such a scheme will be in place to cover the next pay day in April.

• PAYE, SI and rates relief for quarter 2, 2020, for all sectors of business.
• There is enough food and supplies for the jurisdiction and the public were reminded not to panic buy
• The frontier remains open for essential purposes and to allow the movement of supplies and workers
• Private sector nurses have been recruited to add to the existing complement at GHA
• Common sense should prevail and although businesses have been afforded about 30 hours as a grace period to make arrangements, persons should continually asks themselves how necessary it is to go out, as well as avoid large group congregations of any kind (e.g. exercise with your partner or your children, but do not gather to exercise as a group)
• Restaurants can continue to offer their essential delivery and take-away service

Samantha said: “ In our view, whilst the measures restrict fundamental freedom of movement, we agree with Attorney General’s view that the measures are proportionate with regard to the unprecedented state of affairs we find ourselves in. Nevertheless we remain optimistic that although there will be an inevitable economic impact, that businesses is able to adapt to telematic and remote working which we hope should reduce the adverse impact on our economy. We are also thankful that Gibraltar is in a position to assist business and its employees to weather this storm.”

We continue to watch this space for further legislative announcements in this is rapidly evolving space. At ISOLAS, we are on hand to help at this difficult time. We can be your eyes and ears on the ground, and support you in navigating this uncertain future.

If you would like any more information, please contact Samantha Grimes on  samantha.grimes@isolas.gi Stuart Dalmedo on stuart.dalmedo@isolas.gi, or Michael Adamberry on michael.adamberry@isolas.gi

In the height of the Covid-19 pandemic, people are trying their utmost to mitigate disruption in order to continue with the ordinary course of business as far as possible. While technology allows remote working through these difficult circumstances, the need for isolation will inevitably have a knock on effect on the ability to transact and complete deals that require multiple party signatures.

Here, we consider the use of electronic signatures and circumstances where the law allows documents to be signed remotely.

Remote executions and electronic signatures are now well established in law and are commonly used for virtual completions, even in a world without Covid-19. However, the restrictions imposed by many countries due to this pandemic makes it even more important as the world is forced to interact solely via technological channels. It is important that businesses understand the formalities for remote execution and the proper uses of electronic signatures. In particular, the parameters within which documents can be signed remotely or electronically in order to ensure the validity of their contractual arrangements.

Remote executions and the principles established following the Mercury Case

Remote executions are typically used in circumstances where it may not be possible for parties to be physically present to sign a document, and where the use of a power of attorney is not practical or desirable. It should be noted that remote executions may involve wet ink signatures or the use of electronic signatures (separately considered below), both of which can be used to give effect to a virtual completion.

Further to the issues raised in the in the Mercury case[1] (where the High Court held that a signature affixed to a draft agreement cannot be transferred to validly sign and complete the final execution version of the same agreement), the industry recognised that the practice around remote executions and legally effective virtual completions required further clarification. Following a period of consultation, tThe Law Society issued a guidance note on the Execution of documents by virtual means, which helpfully set out various options for performing a Mercury compliant remote execution and virtual completion using wet ink signatures. Although the chosen option will depend on the nature of the document being signed (e.g. a simple agreement, deed, guarantee etc.), we’ve set out below an example of a Mercury compliant remote execution process that can be used for a simple agreement to be signed in wet ink:

1. Lawyer circulates the agreed final version of the document in pdf format.
2. Each party prints off and physically signs the signature page (the whole document does not need to be printed off).
3. A scanned copy of the signed signature page is returned to the lawyer by email. In that same email, the relevant party should also: (a) insert a note authorising the lawyer to attach their signature page to the final version of the document: and (b) attach the final version of the document sent by the lawyer.
4. On completion, the lawyer dates the document and circulates a consolidated version of the final document that includes all signature pages.

The steps highlighted above may vary slightly if the document is to be signed as a deed or is subject to specific formalities under applicable law. Understanding the nature of the document is therefore crucial, as it will dictate the procedure that needs to be followed in the circumstances.

Gibraltar’s position in relation to electronic signatures

When considering the validity of electronic signatures, Gibraltar follows the principles of English law, which is principally derived from the Electronic Identification and Trust Services Regulation (EU/910/2014) (eiDAS regulation) and applicable case law.  The law generally allows for electronic signatures, but there are certain types of documents (whether or not to be executed as a deed) which may require specific formalities as to the type of signature used. It is therefore necessary to check whether the document in question has any particular signing requirements (under statute, a company’s articles or association, case law or by way of contractual agreement) or whether the document will be subject to the general legal principles which allow for electronic signatures.

Documents that cannot be signed via e-signature

There are various scenarios where e-signing is not acceptable regardless of the nature of the document.  In order to determine whether an e-signature is valid in a particular transaction, it is necessary to consider the nature of the transaction that is being entered into and whether there are any overriding factors that may have an impact on whether the document should be signed electronically or in wet ink. Such factors will include considerations as to whether the document must be signed in any one particular jurisdiction for legal, tax or substance purposes. Similarly, when a transaction is cross-border, it is necessary to determine whether the laws of any relevant jurisdiction allow for electronic signatures.

An example of where e-signatures are not acceptable would bein the case of documents that have to be signed and witnessed in the presence of a Notary.  A Notary will generally not accept an electronic signature when notarising a document,instead requiringthe individual/s to sign in wet ink in his/her presence.

In Gibraltar, conveyancing transactions or any other transactions which require documentation to be registered at the Land Registry should also be completed with wet ink signatures on the relevant documentation.

E-signing and commercial contracts

As a general rule, a simple contract (which is not signed as a deed) shall be considered valid if signed by an electronic signature. This includes the signing of different counterparts by various electronic means, whether by ticking a box on a website that indicates acceptance, typing your name, using an e-signature facility such as DocuSign, or signing a document directly on a smart phone or tablet (amongst others).

When signing electronically, people should factor in any relevant counterpart provisions that have been included in the document and in particular, regard should be had to the delivery mechanism relating to that particular counterpart.

E-signing and deeds

The validity of signing a deed by way of electronic signature is not as clear cut as e-signing a simple contract.  In fact, over the years, there have been conflicting views in relation to the same, particularly with regards to the use of e-signing mechanisms such as DocuSign. The general rule is that where a document is to be signed as a deed, this must be done so in the physical presence of a witness.

In a recent report, the Law Commission in the UK arrived at the conclusion that where certain requirements are met, an electronic signature may be considered valid even in the case of a deed.  The caveat is that in order to be acceptable, a deed signed electronically must be done in the physical presence of the person who is attesting the signature as a witness. This means that where a witness is sent an electronic signature for attestation purposes via email, post or otherwise, the document will not be considered validly executed.

In the case of Gibraltar companies, assuming no specific formalities apply as to the type of signature required, it follows that there is legal authority to suggest that a deed may be legally executed through the use of electronic signatures (such as DocuSign) in the following ways:

• Electronically signed by two authorised signatories. In this case, regard should be had to any specific delivery mechanism contained in the document.
• Electronically signed by a director in the presence of a witness who is physically present and attests the director’s signature by affixing his/her own electronic signature. The electronic signature’s time stamp should support the position that the witness was physically present when the document was signed by the director. The delivery requirement would apply equally as described in above.

It should be noted however, that the Law Commission guidance has not been transposed into statute and there does not appear to be any case law that specifically addresses the technicalities related to the evidencing and witnessing of electronic signatures in relation to deeds.  This therefore creates a degree of uncertainty as to the validity of the execution. In the absence of greater legislative clarity, it would be prudent to adopt a more conservative approach, particularly in the case of deeds, so that there is no question as to the validity of their execution.

E-signing and corporate authorisations

Board minutes and board resolutions signed electronically are generally considered acceptable.  A company may therefore sign minutes or arrange for the signature of resolutions via electronic signature.  Where a resolution is being signed from various locations, a counterparts clause should be included allowing for that document to be signed in various different counterparts.

In a similar way, any notices that need to be provided as part of a corporate process, may also be signed electronically but regard should be had to the delivery mechanisms of those notices and any further formalities that need to be considered in order to make them valid.

Key takeaway

By way of summary, the following should be considered when considering the best method of signature:

• Are there any legal considerations, restrictions or formalities that need to be observed in any particular jurisdiction for the signing of the document.

• Are there any legal or tax reasons why it is important that the document is signed in a particular location.

• Is there a requirement that the document be signed in wet ink due to the nature of the transaction.

• Is the document being signed as a simple contract or is this being signed as a deed.

• If the document is a simple contract an electronic signature is ok.

• If the document is to be signed as a deed, what means of electronic signature is being utilised and is the witness physically present at the signing in order to allow it to attest the individual’s signature.

• When utilising e-signing mechanisms such as DocuSign consider whether this is the best method of e-signing in light of the above.

• Generally, corporate authorisations such as board minutes, resolutions, notices etc are able to be signed by way of electronic signature. Regard should be had to any specific formalities that need to be followed under the constitutional documents of the company or the Companies Act.

It is important at these difficult times that businesses should be able to continue operating as normally as possible and that transactions should be allowed to complete successfully.  Remote working facilitates this, however, the rules related to proper execution must be followed in order to ensure validity in contractual arrangements.

If you have any doubts or would like some guidance on this, do not hesitate to contact Emma Lejeune at emma.lejeune@isolas.gi or Karan Aswani at karan.aswani@isolas.gi .

[1] R (on the application of Mercury Tax Group and another) v HMRC [2008] EWHC 2721

To download the PDF version, please, click here. 

As of the 17^th March, Her Majesty’s Government of Gibraltar has enacted emergency legislation which has effectively closed the Supreme Court Registry and the Magistrates’ Court public counters to the public, as well as impacting new and existing civil and criminal proceedings.

ISOLAS LLP Senior Associate Danielle Victor comments on the recently implemented measures, and their impact on litigation, as well as the wider impact that the COVID-19 pandemic is having in Gibraltar.

The outbreak of novel coronavirus (COVID-19) has had significant socio-economic impact across the globe. Gibraltar has been no exception, and at the time of publication, we have had a total of 10 cases in Gibraltar, 8 of which remain active and 2 of which have, fortunately, recovered. Yet, earlier this week, despite there being no active cases in Gibraltar, legislation was passed effectively closing the Gibraltar Courts, and consequently staying all civil actions and vacating all hearings for a period of 30 days. This is an unprecedented move for Gibraltar, but why has it been taken?

Gibraltar’s proximity to Spain means that, for better or worse, its respective populations are intertwined. Whilst this in itself carries its own political complications – let’s not delve into Brexit discussions for a change – never has it been more apparent that the border between these two nations is a political one, and one which this virus does not recognise.

As the COVID-19 pandemic has escalated in Spain over the last week, sure enough, this week we are beginning to see measures being put in place to protect residents in Gibraltar.

For Gibraltar, we have had the advantage of having seen the impact of the virus, now almost worldwide, which has allowed the jurisdiction to pre-empt the effects on a micro-community, such as Gibraltar, and take pro-active measures to help slow the virus down, even before we had any active cases. The contingency measures put in place by the Chief Justice of Gibraltar in exercise of the powers conferred upon him by section 38 of the Supreme Court Act, are no different.

Traditionally, courts require the attendance of parties to litigation (and/or their legal representatives where appropriate). The same goes for judges, witnesses, jurors and even court staff such as bailiffs and clerks. That said, in recent years and more notably with the introduction of Part 18 of the Criminal Procedure and Evidence Act 2011, technological advances have allowed for evidence to be given by means of live feeds and for some preliminary hearings to be conducted in the same way as an alternative to the Defendant having to be taken out of HM Prison, for example.

In a civil context, Part 32 of the Civil Procedure Rules allows for witness evidence to be given by video link (or by “other means”) and in other legal proceedings (e.g. interim applications, case management conferences and pre-trial previews) at the discretion of the court by application and only in limited circumstances. Similarly, Practice Direction 23A allows for hearings of “no more than one hour” to be held via telephone.

This means that, in theory, the Gibraltar Court Service should be well equipped to conduct at least part of its litigation by way of remote access, on a best-case scenario, in order to promote the social distancing policies imposed by Her Majesty’s Government of Gibraltar and at worst, whilst key players within our Court Service are in the quarantine phase at the height of the pandemic.

However, in practice, the mechanisms available, particularly in a civil context are rarely used. This is primarily due to the limited technological infrastructure available in the Gibraltar courts, given our small jurisdiction, when compared to that of England & Wales; the jurisdiction with which the Civil Procedure Rules were drafted in mind of. Even then, it is one thing to have necessary technology in place to deal with hearings remotely on an ad hoc basis, and entirely another to expect the technology available to be put under the tremendous pressure required to conduct all litigation by these means. In light of this, it is questionable whether a similar closure of the Ministry of Justice’s HM Courts & Tribunal Service in England & Wales might follow, only allowing for limited hearings to take place.

With that in mind, what do the contingency measures put in place by the Chief Justice mean in practice?

The measures have been drafted into emergency legislation, specifically, the Supreme Court (Covid 19 Contingency) Rules 2020 and Magistrates’ Court (Covid 19 Contingency) Rules 2020. The rules came into operation on 17^th March 2020 for a period of 30 days unless increased or reduced by further notice in the Gazette, or other suitable public notice.

In summary, actions will be affected as follows:

Supreme Court (whether criminal or civil)

• Save for limited purposes the Registry shall be closed to the public
• Civil actions are stayed[1]
• All hearings are vacated
• Bail is extended in the defendant’s absence and a moratorium granted for payment of fines and compensation
• Hearings may be conducted by telephone
• Applications may be filed by email at urgentcontact@gcs.gov.gi – this email address is to be used for urgent matters on where limitation issues arise
• The court will continue to sit to deal with defendants on remand

Magistrates’ Court

• Save for limited purposes, the public counter shall be closed to the public
• All hearings are vacated
• Bail is extended in the defendant’s absence and a moratorium granted for payment of fines and compensation
• Hearings may be conducted by telephone
• The court will continue to sit to deal with:
  • First appearances
  • Remands
  • Urgent matters

Special arrangements are also being put in place for the collection and payment of family maintenance ordered to be paid through the court. Urgent applications for grant of probate should be directed to registrar@judiciary.gi.

It is worth nothing that rules covering the Court of Appeal have not been published. However, this is under continuous review by the Chief Justice and the President of the Court of Appeal.

The courts are expected to re-open on 17 April 2020, unless the rules are extended or removed prior to that date. Until then, we will continue to keep our clients updated as we forge ahead in such unprecedented times.

If you would like any more information on the reforms, please contact Danielle Victor on danielle.victor@isolas.gi.

[1] The making of a stay imposes a halt, not only upon proceedings, but also upon the expiration of any time limit in those proceedings which had not expired when the stay was imposed. An order staying proceedings applies to every step otherwise required by the CPR, including the obligation to serve a claim form issued before the stay was imposed. When the stay is lifted, or the stay expires, the position as between the parties is the same as it was at the moment that the stay was imposed. The parties (and the court) pick up where they left off at the time of the imposition of the stay (Grant v Dawn Meats UK [2018] EWCA Civ 2212).

The Government of Gibraltar to introduce immediate economic measures to assist Gibraltar businesses amid COVID-19 concerns

Following from Chief Minister Fabian Picardo’s address to the public yesterday amid concerns in relation to the COVID-19 outbreak, Her Majesty’s Government of Gibraltar (HMGoG) is expected to legislate imminently, giving effect to a set of immediate economic measures to allow Gibraltar’s economy to weather the storm ahead.

The economic measures were announced contemporaneously with additional measures concerning the protection of persons aged 70 and older who, on medical advice, are considered to be a class of persons particularly vulnerable to Coronavirus.

The Government’s move comes just days after POTUS Donald Trump announced a set of economic measures designed to stimulate the US economy, and also follows from the recently implemented state of emergency declared in Spain over the weekend. The Chief Minister also commented that HMGoG was considering such measures in light of banking and financial institutions, having given flexibility on interest rates to those financing the acquisition of commercial property, commenting that, just as there is no vaccine for the virus, there is no vaccine for our economy.

ISOLAS LLP Partner Samantha Grimes, who, among her wide range of practice areas, specialises in Employment Law and Immigration, Senior Associate Stuart Dalmedo, who specialises in Tax in Gibraltar, Financial Services and Private Clients, and Associate, Michael Adamberry who specialises in Banking & Regulatory Services, AML and Data Protection, comment on the proposed economic measures to be introduced.  

What’s new?  

Certain measures will only apply to certain businesses (“affected businesses”) in the following sectors:

–        Hospitality

–        Leisure

–        Distributive

–        Catering Sectors

Most of the measures apply just for the month of April 2020 or in the second quarter of 2020 (i.e. 1 April 2020 to 30 June 2020 or ‘Q2’).

The measures can be summarised as follows:

Affected businesses  

1) If HMGoG is the direct landlord of commercial property occupied by affected businesses, there will be no rent payable for Q2.

2) If a private landlord does not waive rent for these affected businesses in Q2, HMGoG has undertaken to introduce legislation to tax the gross rent collected by such private landlords in Q2, without deductions, at the rate of 50%.

3) Where a tenant is not given the above flexibility by their private landlord, HMGoG proposes to allow the tenant a deduction against their tax liability of three times the amount of the rent paid.

4) The above measures will not apply if the private landlord agrees to defer the rent due in Q2 by waiving it and extending the existing lease by three months.

5) HMGoG has waived all rates for affected businesses for Q2.

6) HMGoG will defer (not waive) business water and electricity charges for affected businesses for the month of April 2020 only. Effectively this means a business can spread the cost of its April 2020 utilities bills over the next 12 months, which equates to HMGoG providing an interest free loan by deferring the payments in this manner. We note that many businesses pay by Direct Debit, so affected businesses would need to cancel these (at least temporarily) in order to take advantage of this new measure, and then come to an agreement with the utility providers.

7) HMGoG is asking telecoms providers to consider similar measures although at date of print, there has been no announcement over whether anything has been agreed.

8) Payment of salaries by affected businesses to employees will not attract any pay-as-you-earn (PAYE) or social insurance contributions (neither employer nor employee) for the month of April 2020. It is expected that HMGoG will soon clarify whether tax on those salaries will still be payable by the employees when they receive their tax assessment.

9) A stock purchase scheme has been announced for catering establishments, whereby HMGoG will buy perishable stock from such affected businesses if it is going to spoil.

Cross-sectoral changes, applying to all business sectors  

10)  During Q2, all sectors (i.e. not just affected businesses) will be allowed to defer payments of PAYE and Social Insurance by 8 weeks from due date. The extension of such measures will be considered by HMGoG in consultation with the unions and business representative organisations.

11)  Import duties have been waived from midnight 15^th March 2020 to midnight on 30^th April 2020 on all goods except tobacco, fuel and alcohol classes. This measure may be reviewed before the end of April 2020.

12)  Along with further changes to the employment service (see below) all ETB fees to register employees will be removed for Q2.

13)  Above measures do not apply to supermarket and grocery providers, but do apply to the distributive sector as noted above.

eGaming and Financial Services sectors  

14)  To allow companies in the eGaming and Financial services sectors to relocate staff from overseas, HMGoG is introducing an efficient online ETB process together with streamlined work permit application process for these staff.

15)  Fees payable to Gibraltar Financial Services Commission are now payable quarterly, rather than as lump sum payable in April 2020.

Samantha said: “We welcome HMGoG’s initiative in order to grant much needed economic relief to business sectors afflicted by the socio-economic impact of the Coronavirus. Further announcements are anticipated and, as soon as the legislation is published to give effect to the above proposed measures, we hope for further clarity.”  

If you would like any more information, please contact Samantha Grimes on samantha.grimes@isolas.gi, Stuart Dalmedo on stuart.dalmedo@isolas.gi, or Michael Adamberry on michael.adamberry@isolas.gi.

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