diff --git a/lib/cli/handle-error.js b/lib/cli/handle-error.js
index 021bfeb6e..03e2c91c4 100644
--- a/lib/cli/handle-error.js
+++ b/lib/cli/handle-error.js
@@ -8,8 +8,8 @@ const sfeVersion = require('@serverless/dashboard-plugin/package.json').version;
 const { platformClientVersion } = require('@serverless/dashboard-plugin');
 const { style, writeText, legacy } = require('@serverless/utils/log');
 const slsVersion = require('./../../package').version;
+const { logWarning } = require('../classes/Error');
 const isStandaloneExecutable = require('../utils/isStandaloneExecutable');
-const ServerlessError = require('../serverless-error');
 const tokenizeException = require('../utils/tokenize-exception');
 const logDeprecation = require('../utils/logDeprecation');
 const resolveIsLocallyInstalled = require('../utils/is-locally-installed');
@@ -65,40 +65,48 @@ module.exports = async (exception, options = {}) => {
   if (isInvokedByGlobalInstallation && !resolveIsLocallyInstalled()) {
     const localServerlessPath = resolveLocalServerlessPath();
 
-    try {
-      // Attempt to use error handler from local version
-      // TODO: Remove local version fallback with next major (when its moved to the top of the process)
+    const localErrorHandlerData = (() => {
       try {
-        require(path.resolve(localServerlessPath, 'lib/cli/handle-error'))(exception, {
-          serverless,
-          isLocallyInstalled,
-          isUncaughtException,
-          command,
-          options: cliOptions,
-          commandSchema,
-          serviceDir,
-          configuration,
-          hasTelemetryBeenReported,
-          commandUsage,
-          variableSourcesInConfig,
-        });
-        return;
-      } catch (error) {
-        // Pass and attempt to use old-style error handler from local version
-
-        // Ugly mock of serverless below is used to ensure that Framework version will be logged with `(local)` suffix
-        require(path.resolve(localServerlessPath, 'lib/classes/Error')).logError(exception, {
-          serverless: serverless || { isLocallyInstalled },
-          forceExit: isUncaughtException,
-        });
-        return;
+        return {
+          handle: require.resolve(path.resolve(localServerlessPath, 'lib/cli/handle-error')),
+          options: {
+            serverless,
+            isLocallyInstalled,
+            isUncaughtException,
+            command,
+            options: cliOptions,
+            commandSchema,
+            serviceDir,
+            configuration,
+            hasTelemetryBeenReported,
+            commandUsage,
+            variableSourcesInConfig,
+          },
+        };
+      } catch {
+        try {
+          // Ugly mock of serverless below is used to ensure that Framework version will be logged with `(local)` suffix
+          return {
+            handle: require.resolve(path.resolve(localServerlessPath, 'lib/classes/Error'))
+              .logError,
+            options: {
+              serverless: serverless || { isLocallyInstalled },
+              forceExit: isUncaughtException,
+            },
+          };
+        } catch {
+          // Corner case of local installation being removed during command processing.
+          // It can happen e.g. during "plugin uninstall" command, where "serverless" originally
+          // installed a as peer dependency was removed
+          logWarning('Could not resolve path to locally installed error handler');
+          return null;
+        }
       }
-    } catch (err) {
-      // This is just a fallback as for most (all?) versions it shouldn't happen
-      throw new ServerlessError(
-        'Could not resolve path to locally installed error handler.',
-        'INVALID_LOCAL_SERVERLESS_ERROR_HANDLER'
-      );
+    })();
+
+    if (localErrorHandlerData) {
+      localErrorHandlerData.handle(exception, localErrorHandlerData.options);
+      return;
     }
   }
 
diff --git a/lib/utils/telemetry/generatePayload.js b/lib/utils/telemetry/generatePayload.js
index dcc87ec0f..b124ac8f6 100644
--- a/lib/utils/telemetry/generatePayload.js
+++ b/lib/utils/telemetry/generatePayload.js
@@ -197,6 +197,17 @@ module.exports = ({
       };
     }
     const localServerlessPath = resolveLocalServerlessPath();
+    try {
+      require.resolve(path.resolve(localServerlessPath, 'package.json'));
+    } catch {
+      // Corner case of local installation being removed during command processing.
+      // It can happen e.g. during "plugin uninstall" command, where "serverless" originally
+      // installed a as peer dependency was removed
+      return {
+        'serverless': require('../../../package').version,
+        '@serverless/dashboard-plugin': require('@serverless/dashboard-plugin/package').version,
+      };
+    }
     return {
       'serverless': require(path.resolve(localServerlessPath, 'package.json')).version,
       // Since v2.42.0 it's "@serverless/dashboard-plugin"