Litigation, United Kingdom updates

The art of the (settlement) deal
RPC
  • United Kingdom
  • 23 July 2019

According to the Court of Appeal, giving up a right which a debtor does not even know it has is sufficient consideration for settling a debt. However, the vexed question of what amounts to 'good' consideration remains uncertain enough for those entering into a contract to always consider whether good consideration has been given. Among other things, parties should consider whether good consideration has been provided and, if there is any doubt, pay the contractual counterparty a nominal amount.

Agent's failure to disclose relevant information: a 'Gauguin-tuan' error?
RPC
  • United Kingdom
  • 16 July 2019

In a recent decision concerning the sale of a Gauguin painting, the Court of Appeal confirmed that if an agent sells a principal's property and fails to disclose to the principal that it received a higher offer for the property, it will not lose its commission unless it acted dishonestly or in bad faith. As such, agents should be careful to pass relevant information to their principal, particularly if they are under a contractual obligation to do so.

Collision of legal duties, family loyalties and unreliable truth
RPC
  • United Kingdom
  • 09 July 2019

In a case which has attracted public, press and legal attention, the High Court recently found that the directors of a family-run business should have ensured that the company's interests took precedence over any personal and private loyalties felt towards their family members where those competing interests came into conflict. The court's findings offer a number of helpful reminders of crucial considerations for both businesspeople and legal professionals.

Serving up the truth, the whole truth and nothing but the truth?
RPC
  • United Kingdom
  • 02 July 2019

The High Court has issued a reminder that the duty of full and frank disclosure applies to any application made without notice to the other party. Although this is most typically an issue in applications for injunctions, permission to serve a claim out of the jurisdiction was recently set aside on the grounds of the claimant's failure to disclose to the court a potential limitation defence to the claim.

What expenditure falls within 'ordinary and proper course of business' exception in freezing orders?
RPC
  • United Kingdom
  • 25 June 2019

The costs of pursuing related arbitration proceedings and fighting extradition proceedings could be costs incurred in the 'ordinary and proper course of business' according to a recent Court of Appeal decision. In terms of arbitration expenditure, the decision illustrates that where the proposed expenditure or transaction is complex, the court may not be in a position to make the factual findings necessary for it to authorise the expenditure in advance.

Court of Appeal makes rare order for rectification, with interesting consequences…
RPC
  • United Kingdom
  • 18 June 2019

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 clauses
RPC
  • United 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.

How are foreign states' decisions on EU directives recognised in English courts?
RPC
  • United Kingdom
  • 04 June 2019

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.

Economic duress: when is a threat not an (illegitimate) threat?
RPC
  • United Kingdom
  • 28 May 2019

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.

Disclosure pilot scheme under spotlight: application and privilege
RPC
  • United Kingdom
  • 21 May 2019

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.

Novel approach to measuring damages resulting from a breach of warranty
RPC
  • United Kingdom
  • 14 May 2019

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 activity
RPC
  • United 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.

No exceptions to exclusionary rule: Court of Appeal confirms established principle
RPC
  • United Kingdom
  • 30 April 2019

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.

Duty of care can exist between parent company and third parties affected by subsidiaries' actions
RPC
  • United Kingdom
  • 23 April 2019

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.

Should fraud unravel all? The Supreme Court thinks so
RPC
  • United Kingdom
  • 16 April 2019

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.

English court trumps FBI
RPC
  • United Kingdom
  • 02 April 2019

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 allegations
RPC
  • United 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.

Circumstances in which acting in breach of EU sanctions will kill claims
RPC
  • United Kingdom
  • 19 March 2019

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.

Court of Appeal: agency is not always enough to engage law of bribery and secret commissions
RPC
  • United Kingdom
  • 12 March 2019

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.

Enforceable oral contracts – Supreme Court looks to conduct and context
RPC
  • United Kingdom
  • 05 March 2019

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.

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