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The Court of Appeal has ordered rectification resulting in one party being in breach of warranty and liable to pay damages. It is rare for the court to order rectification as it is often difficult to satisfy the test to do so. This case serves as a welcome reminder that the court is willing to order rectification to prevent one party from seeking to take advantage of a situation when a mistake is discovered.
Court of Appeal upholds decision on importance of industry standard documents in conflicting jurisdiction clausesUnited Kingdom | 11 June 2019
The Court of Appeal recently upheld a High Court decision highlighting the risk that English and Italian courts may reach different decisions on the underlying factual background of related disputes even where the disputes could be said to fall under different agreements. The decision clarifies that the English courts put the certainty of industry standard documentation first when determining the applicable jurisdiction.
The High Court recently struck out a claim by the beneficial owner of certain notes that had sought a declaration that an event of default had occurred. The case illustrates how administrative decisions in a foreign state in relation to EU directives are recognised in the English courts and the reluctance of courts to make decisions based on the anticipated outcome of foreign proceedings.
The Court of Appeal recently examined the circumstances in which a threat not to enter into a contract can amount to economic duress and found that, broadly speaking, it is when pressure is exerted in bad faith. The main thread running through the court's decision is the need for clarity and certainty in contract law, particularly in commercial dealings.
The chancellor of the High Court recently clarified to which cases the disclosure pilot scheme applies. He also provided useful guidance on the extent to which the court should exercise its discretion to inspect allegedly privileged documents under the new regime and emphasised the change in behaviour and culture envisaged under the pilot.
The accepted approach of diminution in the value of a target company was recently challenged in the High Court of Justice. The case concerned the purchase of shares in a bank that had a $14.5 million exposure to Lehman Brothers' bankruptcy. The purchaser sued the seller for damages in that sum, alleging that its failure to provide for the Lehman exposure in the accounts amounted to a breach of warranty.
High Court seeks to clarify whether speculative investment by a private individual is a business or consumer activityUnited Kingdom | 07 May 2019
The High Court recently dismissed a jurisdiction challenge against a private individual making speculative currency transactions on the basis that she could be considered a consumer under the recast EU Brussels Regulation. This judgment demonstrates that the question of whether a private investor is a consumer for the purposes of regulation remains unclear and will often turn on the facts. With a lack of clarity in the case law, it also demonstrates the need for the issue to be considered at a higher level.
The Court of Appeal recently reiterated that, while evidence of pre-contractual negotiations can be adduced to demonstrate how a transaction came about or what its commercial aims were, it cannot be adduced to aid the interpretation of the contractual provisions themselves. The case also confirms that the English courts continue to take a doctrinal approach to contractual interpretation.
A recent Supreme Court decision concerned a mass tort claim and the potential liability of an English parent company for the actions of its foreign subsidiaries. The court found that a duty of care can exist between a parent company and third parties affected by the actions of its subsidiaries, but was reluctant to place limits on the types of case where a parent company might incur a duty of care.
According to a recent Supreme Court decision, if a claimant applies to have a judgment set aside due to fraud, they need not attempt to uncover that fraud before the judgment, even where it is suspected. The case indicates that fraud should unravel judgments in order to safeguard against injustices. Further, the court has made clear that innocent parties should not be burdened with an obligation to constantly keep their eyes peeled for acts of forgery.
In a high-profile acquisition claim, the High Court held that the implied undertaking against collateral use of documents received in the course of litigation prevented disclosure of those documents to the Federal Bureau of Investigation. The court's comments show clearly the level of scrutiny which will be given to requests or demands made by third parties for the disclosure of documents obtained through ongoing proceedings, no matter the standing of the person or authority that makes it.
Defendants need not make reasonable enquiries of third parties where they cannot admit or deny allegationsUnited Kingdom | 26 March 2019
A recent case before the Court of Appeal provides clear guidance that a defendant may properly plead that it is unable to admit or deny an allegation in circumstances where the allegation's truthfulness or falsity is neither within the defendant's factual knowledge nor capable of being determined from documents or other information available to it.
A recent High Court case is an interesting example of the extent to which entities complicit in the breach of EU sanctions are still able to bring legal proceedings relating to matters arising out of those breaches. However, it is difficult to draw any broad principles from this case given its specific factual circumstances. Of particular interest is the judge's analysis that it was considered material that the relevant activity breaching the sanctions at the time was no longer prohibited.
The Court of Appeal recently held that a seller paying a fee to an acquisition agent without the buyer's knowledge does not render the contract for sale void or voidable. This judgment sets the bar high for parties to prove that a sufficient relationship of trust and confidence exists in order to engage the law on bribery and secret commissions. Notably, an agency relationship will not necessarily be enough to evidence the requisite degree of fiduciary duty.
The Supreme Court recently showed that it is reluctant to find an agreement too vague or uncertain to be enforced where the parties intended to be contractually bound and acted on their agreement. In these proceedings, three courts came to differing conclusions, which highlights the difficulties inherent in assessing contract formation and implied terms, especially where there is no agreement in writing.
A recent Court of Appeal decision has confirmed that the test for deciding whether a claimant has a good arguable case is relative. Where a court lacks the evidence to decide which party has the better argument, a more flexible approach should be adopted. In circumstances where the evidence is thin, it is not all relative and claimants are required only to demonstrate a plausible evidential basis that the gateway exists.
Section 14A of the Limitation Act sets out the position on latent damage in negligence claims. Litigation around the application of Section 14A has predominantly centred on when the claimant has the requisite knowledge to bring a claim and if a claim could, and should, have been brought earlier. This has been brought into sharp focus in a recent case relating to a claim brought against the Bank of Scotland.
A recent Court of Appeal decision examined a dispute concerning entitlements under an earn-out provision in a share purchase agreement. The claimant argued that, under the agreement, he was entitled to provide consultancy services for a further period to be agreed by the parties. However, the court found that there is no obligation on parties to negotiate in good faith about matters which remain to be agreed and that the defendant was free to negotiate in accordance with its own commercial interests.
The High Court recently confirmed on appeal from a master's decision that although an entire agreement clause concerning the sale of Nottingham Forest Football Club purported to extinguish all previous representations, it did not in fact exclude liability for misrepresentation. That there were contractual indemnities covering effectively the same subject matter did not, without clear language, mean that liability had been excluded.
A recent High Court of Justice case reinforced the courts' desire to remain the guardians of honest behaviour in relation to financial market practices; the objective standards of dishonesty are to be set by the courts rather than the market. Parties must therefore rely on contemporaneous documents when trying to prove claims for dishonest assistance, as the court will not permit them to adduce expert evidence of wider market practice.
The recent decision in Barclays Bank plc v Price extends the established test that a demand made under a guarantee for an excessive amount may nevertheless be effective as a demand for what is due in circumstances where the amount that has been demanded exceeds an express liability cap. This judgment will surely be a welcome extension of the authorities relating to the operation of guarantees (and the demands made thereunder) for the creditors that benefit from such arrangements.
The Court of Appeal recently found that communications discussing a commercial proposal to settle an existing dispute are not privileged and are therefore subject to scrutiny by the court. Those engaged in litigation should take care not to commit to writing their commercial discussions on settlement and to frame their settlement discussions in terms of the legal advice that they have received on the litigation risks.
When will courts grant retrospective permission for disclosed documents to be used outside main litigation?United Kingdom | 11 December 2018
The High Court recently considered applications for retrospective permission to make collateral use of documents disclosed under a pre-action disclosure order where there had been a breach of the implied undertaking as to the use of disclosed documents. Although retrospective permission may be given, an application for permission should not be used to circumvent the usual procedure for obtaining consent to collateral use of documents.
The Court of Appeal has dismissed an application to strike out a claim for abuse of process on the basis of Summers v Fairclough in circumstances where final judgment had already been handed down. There are already established methods of challenging judgments allegedly obtained by fraud, and these should be utilised instead.
With privilege remaining a hot topic, and with the recent SFO v ENRC decision still fresh in many legal professionals' minds, another judgment on legal advice privilege has been handed down – this time with a lesson for solicitors drafting supporting witness statements. It is of crucial importance to ensure that the utmost care is taken when making a claim to privilege, not least because the opposing party will usually have no choice other than to rely on what it is told.
In the latest of a long line of higher court authorities debating the boundaries between black letter and more purposive approaches to contractual construction, the Court of Appeal has taken another step away from the high-water marks of the business common sense approach to contractual meaning. The decision confirms that parties are more likely to be able to work contractual machinery according to the black letter terms in which it is set out on the face of the contract.
The test for inducement in cases of fraudulent misrepresentation is whether 'but for' the misrepresentation, the claimant 'might' have acted differently. The lower hurdle was clarified by the High Court in Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises and represents a departure from previous authorities, in which the test had been said to be whether but for the misrepresentation the claimant would have entered into the contract anyway.
The proliferation of fraud and blackmail offences carried out online has left victims, and the courts, playing catch-up. However, in a number of recent cases, the civil courts have shown that they are adapting to keep pace with cybercriminals and are addressing the imbalance that exists between victims and criminals who seek to hide behind a veil of anonymity in this digital age.
The Court of Appeal recently considered whether claims for loan principal and interest were separate claims for the purpose of an application for permission to serve a claim form out of the jurisdiction and whether an obligation to pay interest could be implied into an oral loan agreement. The decision provides a helpful clarification of the nature of claims for interest and the application of the modern test for implication of contractual terms to a claim for an implied term for payment of interest.
The Court of Appeal recently held that a director who had made continuing fraudulent misrepresentations was liable for damages calculated at the point of sale and not at the point of entering into the contract. This judgment is a reminder that, in the right case, deceit may be used to pierce the corporate veil. It also highlights the considerations when assessing damages regarding continuing representations, particularly when there is time between the representation being made and the performance of the contract.
To render a force majeure clause watertight, time should be taken to consider all of the potential risks that may prevent parties from fulfilling their obligations under the contract and spell these out in the clause. Also, where an event has occurred, parties must be able to demonstrate that the force majeure event was the sole cause of any failure to fulfil their contractual obligations. This was recently upheld by the High Court.
It is understandable that directors might be reluctant to seek legal advice – be it due to concern about time or cost or a potential conflict of interest if seeking advice internally. However, as a recent case demonstrates, this is a small price to pay to avoid the time and financial cost of a claim, especially when a company's subsequent precarious financial position shines a light on an officer's behaviour and competence.
The Commercial Court recently discharged an injunction restraining the enforcement of a US court order made under Section 1782 of Title 28 of the US Code (Assistance to foreign and international tribunals and to litigants before such tribunals). Section 1782 applications can be a useful weapon in an English litigator's armoury as a means of obtaining evidence under the control of a US-based entity through US-style discovery, including by the use of depositions and documentary evidence.
The Supreme Court recently ruled that a bank providing a reference relating to its customer owed a tortious duty of care only to the addressee. The decision reflects the wider judicial trend of restricting the circumstances in which duties of care for negligent misstatement are found to exist on the basis of an assumption of responsibility by the party making the statement.
The Court of Appeal recently confirmed that an English jurisdiction clause in the underlying International Swaps and Derivatives Association Master Agreement under which certain swaps were made should be applied to disputes relating to the swap transactions, rather than an Italian jurisdiction clause in a competitor agreement governing the parties' generic relationship.
Football club's entire agreement clause performs impressive save against negligent misrepresentation claimUnited Kingdom | 28 August 2018
A recent case serves as a lesson that context is key to a watertight entire agreement clause. The purchasers of Nottingham Forest Football Club brought a negligent misrepresentation claim against the club's sellers. The sellers denied the claim and argued that the share purchase agreement provided a contractual procedure for dealing with any misrepresentations of the club's liabilities, and that the relevant entire agreement clause should therefore be read in that context.
A master's decision to allow a non-party to proceedings to access a wide range of documents in the proceedings was recently reviewed by the Court of Appeal. As well as providing useful guidance on how the court should deal with applications by non-parties for access to documents, this case is a reminder to parties to proceedings that they should be aware of the potential loss of confidentiality.
A recent case reiterates the significance that the courts will ascribe to the use of industry-standard documentation when considering 'competing' jurisdiction clauses in related contracts. The case also provides an important reminder of the necessity of seeking the court's direction before engaging expert evidence, particularly in the interim stages of litigation.
A recent case considered the interaction between a warranty in a receivables financing contract which specified that one of the parties was not prohibited from disposing of the receivable and a clause expressly prohibiting assignment without the other party's consent in an underlying sale and purchase agreement. The case raises important issues relating to the effect and interpretation of non-assignment clauses and suggests that this is an area ripe for further consideration by the Supreme Court.
The Court of Appeal recently held that agreements for the transfer and purchase of shares give rise to dependent obligations and that one party does not therefore become a debtor to the counterparty immediately as a result of their failure to pay. This judgment has implications for the forms of redress available to the wronged party in analogous situations and makes clear the commercial approach to contractual disputes encouraged by the courts.
The Court of Appeal has held that a remarkably broad exclusion clause was not unreasonable within the framework of the Unfair Contract Terms Act 1977. The judgment includes a discussion of various factors which the court will take into account when deciding such cases.
Contractual fiction clauses, unfair contract terms, parliamentary sovereignty and limits of party autonomyUnited Kingdom | 03 July 2018
In a recent decision, the Court of Appeal set down a significant marker that so-called 'contractual estoppel' has no special status and is to be treated as just another form of exclusion of liability. In particular, it was ruled for the first time that any reliance on a contractual estoppel to seek to defend a claim for pre-contractual misrepresentation is an attempt to exclude liability which falls to be assessed for reasonableness under the Unfair Contract Terms Act 1977.
The Court of Appeal recently provided helpful clarification on what constitutes 'knowledge' for the purposes of Section 14A of the Limitation Act 1980. The judgment reiterates that it is not when the claimant first knew they might have a claim for damages against the defendant that is relevant; rather, it is when they knew enough to make it reasonable to investigate further and, if necessary, obtain professional advice.
Freezing orders are a valuable weapon in the arsenal of parties seeking enforcement in England and Wales. However, they come with a heavy responsibility on the part of the applicant. If one gets it wrong, a great deal of time, effort, costs and tactical initiative are likely to be lost. The High Court recently provided helpful guidance as to which factors may be relevant when determining whether a freezing order should be discharged.
In a recent dispute about the existence of a contract, the High Court found that the parties intended to be bound only when all parties had signed. An open-ended duty to negotiate in good faith was void for uncertainty and the claim was struck out. This case is a useful reminder of several principles, including that an obligation to negotiate in good faith must be tightly drafted and time limited in order to be effective.
A recent Supreme Court decision is now the leading case on negotiating damages. It has emphasised the compensatory basis of contractual damages and restricted negotiating damages to cases where the obligation breached by the defendant protected an asset with economic value. While the decision offers welcome clarity, it leaves some important questions unanswered.
In a recent case, the Supreme Court considered the application of Section 21(1)(b) of the Limitation Act 1980 with respect to claims against the directors of a company for an unlawful distribution of the shareholding. The court acknowledged that Section 21 was primarily aimed at express trustees, and that it was found to be applicable to company directors "by what may fairly be described as a process of analogy".
In a recent case, the High Court confirmed the validity of a senior noteholder's directions under a note structure governed by the laws of multiple jurisdictions. In doing so, it highlighted the common ground between the London and New York markets with regard to the common law principles of contractual construction and demonstrated the efficiency of the speedy trial procedure in the Financial List.
The English courts can make draconian worldwide freezing orders. Such an order will usually contain an undertaking by the applicant to seek permission from the English court before enforcing the order outside England and Wales or seeking an order "of a similar nature". A recent commercial court decision provides welcome guidance on how it will approach the scope of this undertaking.
In a recent case, the High Court considered whether, in the event of the early termination of a transaction under the 2002 International Swaps and Derivatives Association Master Agreement, a party could 'remake' its determination of the close-out amount and the nature of that party's discretion in calculating the close-out amount.
In the first contested case of its kind since the Bribery Act 2010 came into force, a company was found guilty under Section 7 of the act for failing to prevent bribery after its defence of having adequate procedures in place to prevent bribery was unsuccessful. Given that there is no one-size-fits-all rule for what constitutes 'adequate procedures', it will be difficult for a company to assess whether it falls on the right side of the line.
Belhaj v director of public prosecutions – court clarifies two issues relating to waiver of privilegeUnited Kingdom | 17 April 2018
In a case concerning misconduct in public office, the claimants sought to challenge the decision not to prosecute by beginning judicial review proceedings against defendants that included the director of public prosecutions. The court recently held that a limited waiver of legal professional privilege prevented the use of the privileged materials in a related judicial review and that legal professional privilege could be reasserted over inadvertently disclosed privileged material.
The Supreme Court recently held that the location of the incident from which damage arose in the context of a claim alleging the tort of conspiracy to injure by unlawful means was where a conspiratorial agreement was agreed. In this case, that location was England and the English courts therefore had jurisdiction.
The High Court recently heard an appeal regarding the costs consequences of a withdrawn Part 36 offer where a second offer was made and neither was beaten at trial. In holding that costs flowed from the second offer only, the court provided useful guidance on how to structure multiple offers so that a party's original costs protection is preserved.
The Court of Appeal recently handed down its much-anticipated judgment on the mis-selling and London Inter-bank Offered Rate (Libor) manipulation test case earlier this month. While the appeal was dismissed in full, the Court of Appeal's decision has clarified a number of aspects of the law in this area – in particular, the circumstances in which an implied representation in respect of Libor would arise.
The claimants in a recent case applied to inspect certain documents created in foreign proceedings over which the defendants – companies belonging to the mining company Glencore – had asserted litigation privilege. Glencore controlled these proceedings but was not a party to them. It unsuccessfully argued that this was a permitted exception to the general principle that a party cannot claim litigation privilege out of proceedings to which it is not a party.
The English High Court recently considered the correct approach to the redaction of documents in civil proceedings. The court held that the right to redact irrelevant material applies both to standard disclosure and the right to inspect documents referenced in statements of case. In the short term, this case confirms a party's ability to redact documents in order to protect commercially sensitive information. In the long term, the practice of redacting such information will likely be confirmed by way of an express rule.
In a recent case, the Court of Appeal upheld a decision that the appellant bank had breached the Quincecare duty of care which it owed to its corporate customer by making payments without proper enquiry, in circumstances in which a reasonable banker would have been on notice that the customer's director was perpetrating a fraud.
In a recent case, the Court of Appeal upheld the High Court's decision to strike out certain breach of warranty claims on the basis that the buyer had given the seller inadequate notice of those claims. The buyer's attempt to keep its options open by drafting its notices widely proved fatal to its claims, as it failed to identify the specific warranties to which its claims related as required by the share purchase agreement.
High Court confirms availability of Bankers Trust orders to trustee claimants seeking to recover misappropriated assetsUnited Kingdom | 06 February 2018
The High Court recently confirmed for the first time the availability of the commonly encountered Bankers Trust order to trustee claimants of stolen or misappropriated property, highlighting the flexibility of the court's equitable jurisdiction when presented with new situations. The decision also illustrates the court's willingness to grant Norwich Pharmacal relief to facilitate the recovery of unlawfully dissipated assets and the complimentary interim remedies available for that purpose.
A recent Commercial Court decision concerned a claim against three former directors of the claimant companies in respect of fraudulent schemes involving construction projects and land acquisitions in Kazakhstan. The decision provides guidance on what is required to prove a complex fraud and when foreign limitation periods will be disapplied because they cause the claimant undue hardship.
In Sharp v Blank the High Court considered the defendants' application for approval of their revised cost budget on the basis that there had been significant developments in the litigation. The judgment provides helpful clarification of the court's jurisdiction to approve costs that have already been incurred between the date of the original approved budget and the date of the application hearing.
In The ECU Group plc v HSBC Bank plc the High Court held that HSBC, the proposed defendant, had to provide pre-action disclosure of Bloomberg messages, emails, trading data and compliance documents. The decision is a useful example of the categories of documents that the court may be prepared to order against a bank in respect of pre-action disclosure. However, the scope of disclosure was kept narrow, a factor which no doubt played in ECU's favour.
The English High Court recently found that service by email of arbitration proceedings was not valid under Section 76 of the Arbitration Act 1996 on the basis that the correspondence had been directed to the email address of an employee who did not have the authority to accept service. The judge found that in circumstances where service is by way of an individual email address, validity of service depends on the application of agency principles.
Supreme Court holds that a defendant cannot be liable for a greater loss than was caused by its negligent valuationUnited Kingdom | 12 December 2017
The Supreme Court recently clarified that when applying the 'but for' test in the context of a negligent valuation, the basic comparison is between the position that the claimant would have been in if the defendant had fulfilled its duty of care and the claimant's actual position. This means that a defendant cannot be liable for a greater loss than was caused by its negligent valuation.
The High Court recently considered the extent to which legal advice privilege could attach to documents which were not communications of legal advice between lawyer and client, but from which privileged legal advice could be inferred, and held that privilege could indeed apply to such documents. The test is whether there is a "definite and reasonable foundation" for such an inference to be made as opposed to material that would merely make the reader speculate what the legal advice was.
Ghosh test overturned: dishonesty according to the standards of ordinary, reasonable and honest peopleUnited Kingdom | 28 November 2017
The Supreme Court recently held that the test for dishonesty should be assessed only by reference to whether the defendant's conduct is dishonest by the objective standards of ordinary, reasonable and honest people. In its ruling, the Supreme Court concluded that there were convincing grounds for holding that the second limb of the well-known Ghosh test did not correctly represent the law and that directions based on it should no longer be given.
A recent application made by the insolvency practitioner of Agrokor, a major Croatian conglomerate, resulted in recognition in England of a stay of civil proceedings against the group. The purpose of the application was to halt any proceedings in relation to Agrokor's securities and debt obligations containing English law and jurisdiction provisions, pending the restructuring in the Croatian insolvency proceedings of the group's affairs.
The Commercial Court recently clarified the test for 'special circumstances' in applications for permission to use previously disclosed documents. The court did not grant permission to the applicant in this instance, on jurisdictional grounds. However, in setting out a number of factors which influence its discretion to waive or vary the restriction, the court has given useful guidance to those that may pursue applications for collateral use in future.
The Court of Appeal recently heard an appeal relating to whether complex, loss-making financial transactions were enforceable against the respondent in circumstances where they had been entered into against the backdrop of a corrupt relationship between the appellant counterparty and the respondent's agent. The court's decision demonstrates that appellate courts are willing to apply equitable principles creatively in order to avoid what they perceive to be substantial injustice.
The Court of Appeal recently applied established English conflict of laws rules in holding that a non-bearer holder of issued notes was not entitled to sue under those notes for breach of contract. In doing so, the court has provided commercial certainty to downstream holders of interests in securities, but left open important questions as to third-party redress under these structures.
In Grosvenor Chemicals Ltd v UPL Europe Ltd disclosed documents were used by the UPL companies for a collateral purpose in breach of Civil Procedure Rule (CPR) 31.22. Grosvenor applied to the court under CPR 81.14(1) for permission to bring committal proceedings against the UPL companies and their law firm. The decision underlines the difficulty involved in persuading a court to allow an application for committal proceedings.
LMA model form-based facility agreement does not constitute lenders' standard terms for Unfair Contract Terms ActUnited Kingdom | 10 October 2017
The Court of Appeal recently upheld a decision to allow summary judgment for sums due under a facility agreement, rejecting the defendants' arguments that the facility agreement – based on the Loan Market Association model form – constituted the lenders' standard terms for the purposes of the Unfair Contract Terms Act 1977. Had the act applied, the terms of the facility agreement would have been subject to a reasonableness test.
The Technology and Construction Court was recently asked to determine the enforceability of a limitation of liability clause in an IT services agreement. The case provides a useful reminder to practitioners of the importance of clear contractual drafting to ensure that the agreement accurately reflects the parties' intentions as to their respective obligations and liabilities.
The High Court recently considered the "unfortunate tension" between Civil Procedure Rules (CPR) 6.14 and 7.5 regarding effective service of a claim. The judgment provides a helpful analysis of the purpose of CPR 6.14 in circumstances where there is uncertainty surrounding the validity of service of a claim form.
The High Court recently upheld the contractual right of an online foreign exchange retail trading broker to revoke trades entered into by a customer, on the basis that the customer had breached a contractual duty not to trade abusively. The court held that the broker's right to revoke was not subject to a Braganza duty to exercise it in a way which was not arbitrary, capricious or irrational in a public law sense.
The High Court recently considered and applied the principle that the right to waive privilege is not property of a bankrupt which is capable of being vested in the trustee in bankruptcy, thus confirming the Court of Appeal decision in Shlosberg v Avonwick Holdings Ltd and rejecting the application of the Crescent Farm principle in bankruptcy cases. The decision prevented the trustees in bankruptcy from using potentially privileged documents as evidence to support a claim.
The Court of Appeal recently allowed an appeal of a first-instance decision not to order the deletion of a privileged email disclosed by the appellant to the respondent. In arriving at its decision, the court extended the principles around inadvertent disclosure identified in Al-Fayed v The Commissioner of Police for the Metropolis to cover situations where an inspecting solicitor does not identify that a document has been mistakenly disclosed, but another solicitor acting for the same party subsequently does.
The High Court recently held that an oral contract for waste removal services had been entered into by a company and not by the company's owner in his personal capacity. The waste removal company, which had provided its services to a company that had gone into liquidation, was therefore unable to recover outstanding sums payable to it. This case demonstrates the importance of ensuring that parties agree contractual terms in writing and document their negotiations with sufficient detail.
Supreme Court considers damages where innocent party avoided greater loss by selling asset following breachUnited Kingdom | 01 August 2017
The Supreme Court recently overturned the Court of Appeal in a judgment which considered the proper measure of damages in a situation where the party suffering loss had avoided a greater loss as a result of the breach by the other party. This decision highlights the issues that parties can encounter following repudiatory breach and disputes that arise regarding alleged acts of mitigation. However, the facts were unusual and the court was limited to considering whether the arbitrator had erred in law.
Lord Sumption, a UK Supreme Court justice, recently delivered a lecture on the development of the English law of contractual interpretation and its potential future direction. He described the shift in the late 20th century from a focus on the language used by the parties to using the "surrounding circumstances" and "commercial common sense" as tools to elucidate the meaning of contractual provisions, but suggested that the Supreme Court is now retreating from this wider and more flexible approach.
A recent High Court decision has provided some clarification of the scope of the compulsory jurisdiction of the Financial Ombudsman Service. The decision has left the scope of that jurisdiction open to discussion and appears to suggest that the courts will take a more mechanical approach to reviewing regulatory decisions.
In Astor Management AG v Atalaya Mining plc the High Court was once again confronted with the task of interpreting an 'all reasonable endeavours' clause. While the decision confirms that the court will use its best endeavours to give such clauses (and their many infamous variants) legal force, it is a reminder to parties that it is preferable to try to achieve legal certainty by defining the degree of effort required with as much precision as possible.
The Court of Appeal recently held that an exemption clause providing that "liability for any claim in relation to asbestos is excluded" was drafted sufficiently widely to exclude liability for negligence where the party relying on it had allegedly failed to identify asbestos at an early stage. It also reiterated that the contra preferentem rule now has a very limited role in the interpretation of commercial contracts negotiated between parties of equal bargaining power.
The Supreme Court recently considered three questions relating to the total loss of the vessel Ocean Victory during a storm at the port of Kashima, Japan. The most controversial question was whether the terms of the insurance clause in the bareboat charterparty between the shipowners and demise charterers provided an exclusive regime for compensation for loss of the vessel that precluded hull insurers' subrogation rights.
In a case involving the shareholders of Lush Cosmetics, the Court of Appeal dismissed an appeal relating to the correct interpretation of two companies' articles of association in respect of the valuation of shares which were subject to pre-emption rights, applying Lord Neuberger's well-known judgment on contractual interpretation in Arnold v Britton.
The High Court recently provided another landmark judgment reaffirming the narrow scope of legal professional privilege. In proceedings between the Serious Fraud Office and Eurasian Natural Resources Corporation Limited (ENRC), ENRC unsuccessfully attempted to protect documents created during internal investigations into suspected bribery and corruption, claiming legal professional privilege.
The Supreme Court recently dismissed an appeal in Wood v Sureterm Direct Ltd. The court upheld the Court of Appeal's decision on the meaning of an indemnity clause and agreed with its application of established contractual interpretation doctrine. The decision confirms the established judicial approach to contractual interpretation: that is, the focus on the words of a given clause.
The Supreme Court recently overturned the decisions of the Upper Tribunal and the Court of Appeal in respect of what it means to be 'identified' in a Financial Conduct Authority enforcement notice. It held that a person is 'identified' if he or she is referred to in such a notice by name or by a synonym. This confirms a narrower interpretation as to whether a person is identified for the purposes of Section 393(1) of the Financial Services and Markets Act 2000.
The High Court recently found that a defendant bank owed and breached a duty to explain the financial implications of fixing the interest rate on the claimants' loans. This case is an as-yet rare example of the successful deployment of an argument that a bank owed a mezzanine duty to its customer of the form identified in Crestsign Limited v National Westminster Bank plc (falling somewhere between a full advisory duty and the standard duty not to make misrepresentations).
The Commercial Court was recently faced with an application by the defendants to strike out claims against them on the basis that the claimant had failed to serve claim forms that it had issued several years earlier. The claimant made a cross-application for alternative service or alternatively for service to be dispensed with under the Civil Procedure Rules. The court refused the cross-application and struck out the claim forms. The judgment contains a useful distillation of the principles relevant in this area.
The Court of Appeal recently clarified the circumstances in which a party to litigation can use a subject access request under Section 7 of the Data Protection Act 1998 to obtain information which may be useful in litigation. This judgment provides clarification on issues relating to the legal professional privilege exception, the concept of disproportionate effort and the relevance of the data subject's motive in making the request.
The Supreme Court recently handed down a short but important judgment on jurisdiction under the EU Brussels Regulation. The court held in no uncertain terms that jurisdiction for the economic tort of inducing a breach of contract between a claimant and a third party lies with the home courts of the place where the harm was directly suffered as a result of the tortious acts.
The Court of Appeal recently emphasised the importance of independence and objectivity in expert evidence. If there is any conflict of interest, familiarity with a party or apparent interest in the outcome of the proceedings, this should be fully disclosed at the earliest stage. In this case the Court of Appeal upheld the trial judge's decision to take into account the "serious reservations" he had as to the expert's impartiality when considering the weight to afford to his evidence.
The High Court recently provided a helpful analysis of the circumstances in which a parent company owes a duty of care with regard to operations carried out by its subsidiary. In this case, establishing whether the parent owed a duty of care was central in determining whether the English courts had jurisdiction. The case is interesting in the context of the readiness of the English courts to hear claims relating to conduct outside the jurisdiction brought by foreign claimants.
The High Court recently rejected a €13.5 million claim for breach of contract, for the main reason that the parties had not manifested an intention to create legal relations, but also due to the absence of certainty in relation to other fundamental terms. The decision serves as a useful reminder of first principles in relation to contract formation and highlights the risks of taking a relaxed approach to documenting contractual arrangements.
In a recent case the Court of Appeal held that a term could not be implied into an agreement because, although it was linguistically consistent, it was substantively inconsistent with the express terms. In doing so, the court shed further light on the application of the "cardinal rule" that an implied term must not contradict any of the express terms of the contract.
Court of Appeal provides timely reminder of principles relating to clear and unambiguous contractual negotiationsUnited Kingdom | 21 February 2017
A recent Court of Appeal decision confirms established principles about the significance of the whole course of dealings when establishing whether a contract has been formed and the effect of denoting such dealings as 'subject to contract'. It also serves as a timely reminder of how to progress contractual negotiations so as to avoid uncertainty and potential disputes later on.
A recent decision demonstrates the interplay between arbitration and litigation, considering whether legal proceedings commenced by A against C are an abuse of the court's process where arbitration proceedings between A and B have decided the issue in question. The Court of Appeal held that a prior arbitration award can found an argument that subsequent litigation against a third party is an abuse of process, but will rarely do so.
A recent Court of Appeal decision provides a useful reminder of the difficulty in establishing the high threshold of fraud and that the fraud exception to the principle of autonomy is likely to be relevant in only very few circumstances. The decision provides comfort that the courts should not second guess honest representations of law. In the absence of clear evidence that the signatory acted fraudulently, the autonomy principle should be upheld.