Are there any guidelines which I must follow?

I run my own small business. A client is refusing to pay me, blaming COVID-19. What can I do?

Several people owe me money but it's been some years since it was due. What can I do?

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Q: Are there any guidelines which I must follow?

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A: All small and large businesses must comply with the guidelines issued by the Ministry of Health which may be published from time to time. The Minister is entitled to issue other guidelines for trades, professions, businesses, services, activity or public gatherings. 

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Q: I run my own small business. A client is refusing to pay me, blaming COVID-19. What can I do?

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A: To an extent, it depends. Written contracts often have a force majeure clause, which, put simply, is an 'act of God' clause. It may allow persons to avoid doing what they're supposed to do under the contract where unforeseeable events (think natural disasters, war, civil riots, coup d'etats or pandemics) take place. This is not always the case, and its uncertain whether this could still apply to the COVID-19 pandemic, since the pandemic has been going on for over 18 months.

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Generally, however, if there is a force majeure clause, your client may be able to cancel the contract, to avoid performance (in whole or part), or to suspend their requirement to do a particular act and to extend the time for so doing. How these clauses work, if at all, are very fact specific and are usually interpreted narrowly.

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In any event, how these clauses work depends on the circumstances, the nature of the unforeseen event which has occurred, how it has impacted upon the contract and the steps that the parties have taken to limit the effect of that event on the contract.

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Where there is no written contract, your client may also try to say that the contract has been frustrated. This is also very specific and involves an event that was not reasonably contemplated. Again, since the pandemic has been going on for nearly a year and a half, whether your client can use this (especially for newer contracts) is doubtful.

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Whatever it is, there are options that you can explore to recover the money owed to you. Force majeure and frustration are just some of the defences that your client may use. They may not be successful. As in all cases, if someone is owing you money, speak with your lawyer immediately.

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Q: Several people owe me money but it's been some years since it was due. What can I do?

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Generally speaking, you have four years in which you may file civil Court proceedings against someone who owes you money (other causes of action (that is, the other legal entitlement you have to sue someone) may be subject to other limitation periods depending on the facts). Usually, this four year period will start from the date on which the monies became due to you. 

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This period can be extended depending on whether the debt owed to you was acknowledged, or if monies were paid. 

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How does this work in terms of COVID-19? We know that COVID-19 has had a massive impact upon the economy. There are a lot of people with significantly less income which sometimes mean that they can't pay their debts. Fortunately, if you're owed money, the Government has legislated that the period between 27 March 2020 to 02 May 2022 shall not be included in computing the limitation period. Although this was originally meant to be effective until 30 April 2020, it was extended until 02 May 2022. The suspension has since been lifted, which means that time has started back to run.

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What does this mean? Simply, limitation would stop running as of 27 March 2020 and would restart on 02 May 2022. This is understood that if on 26 March 2020 you had 28 days until your limitation period expired (remember, that's usually four years), on 02 May 2022 that 28 days period would start back counting down.

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Remember, in all cases, consult with an attorney so that you know exactly when your limitation period expires. Even though limitation has been suspended, the civil courts are functioning normally and you can start a High Court action even between the period of 27 March 2020 to 02 May 2022.

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Last updated: 11 November 2022.