Assistance to Tenants of Gray’s Inn
The Management Committee is acutely aware of the pressures presently faced by very many barristers and their Chambers, and also of the difficulties which will arise, particularly for some.
In the last few days the Inn has been approached by some Chambers located within the Inn seeking assistance in respect of their rents which will fall due over the course of the next few months. Yesterday the Management Committee held a meeting by video link and carefully considered that approach. It was decided that the Inn should offer such assistance where it reasonably can. This will be done by way of a general policy which however accommodates the circumstances of any particular set.
It would be helpful to begin with the position of the Inn, and the impact of this crisis on us. The two main streams of income for the Inn are rents and the proceeds of commercial events. Our estimate for projected losses from the latter currently stands at £1.0m, and that is a conservative assumption, based on a return to normal activity in the middle of the year. We have one current and two upcoming major building projects, one of them necessary and urgent to facilitate the new ICCA Bar course. That is a £4m commitment. We have undertaken considerable extra costs to attempt to keep Qualifying Sessions going by alternative means, since otherwise existing students will be unable to qualify and be called in the year they planned, with all the consequences for their lives and careers, setting aside their finances. The Inn has already had to engage in significant rejigging of its finances to prepare for the next months.
Our Chambers are very important to the Inn. We do have to balance that against other priorities, in particular our students, scholarships and educational functions. I mention this not to diminish the importance of healthy chambers in the Inn, but to make the obvious point that we are faced with real competing demands.
We are also aware that it has been confirmed that barristers who are self-employed sole traders and chambers, which operate as unincorporated Trade Protection Associations (TPAs), qualify for the Coronavirus Business Interruption Loan Scheme (CBILS) and the VAT deferral for businesses. Both were announced by the Government as part of the support measures for businesses during the COVID-19 outbreak. We already know that limited companies, through which some chambers operate, are eligible. Whilst we appreciate these measures will provide significant help, we also accept that in some cases further assistance will be needed.
We will approach this on a case by case basis, since some of our chambers will be very well resourced, and it seems very likely there will be a spectrum of financial capacity and thus of need. We will require detail as to the basis for financial need in any given case. We will need confidential access to chambers accounts so as to see the picture, and we will need to be satisfied that the senior and better-off members of chambers are doing their best to protect the younger and more junior practitioners, and those who can only practise part-time by reason of health or family responsibility. Of course, we understand that normally we could not and would not ask for such intrusive information, but this is not a normal situation. Support for chambers will come at a cost to our capacity to support students, scholarships and the charitable activities of the Inn, and needs to be justified.
Where the evidence of need can be provided, which it is demonstrated cannot be satisfied by Government loans or schemes, commercial loans or the banks, or by a greater contribution being made by the more senior or better off members, then for chambers with a good payment record, the Inn will be prepared to agree to defer (interest free) payment of the rent due in June to September or December. The September rent would be due on time and would have to include payment of the deferred rent that would otherwise have been payable in June. If such chambers continue to have difficulties, a further extension or extensions will be considered subject to agreement by the Management Committee. We have already taken legal advice as to the best and simplest way of doing this, and the mechanism of deferment would be a side letter to the lease.
We have established a Hardship Working Group chaired by the Vice Treasurer who will consider all requests for support from tenants and residents.
If you wish to discuss this confidentially with the Under Treasurer, email Tony Harking and he will provide detail of the information required.