A recent Court of Appeal case considered the proper interpretation of exceptions or force majeure clauses and provided guidance on the correct application of the compensatory principle of damages. This case provides yet another warning about the need for clarity in drafting contractual clauses and the implications of getting it wrong.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
The Commercial Court recently rejected an application to set aside an arbitral award entitling the respondent to its costs of third-party litigation funding on the ground of serious irregularity. The court also held that the power under the Arbitration Act 1996 to award "legal and other costs" includes the costs of litigation funding.
The High Court recently clarified what constitutes a warranty, including its ability to be construed as a representation of fact for the purposes of bringing a claim under Section 2(1) of the Misrepresentation Act 1967. It found that the plaintiff's claim that the defendant had induced it to enter into a share purchase agreement by making false representations contained in certain warranties in the agreement had no prospect of success.
The High Court recently granted summary judgment for rectification of a trust deed without a hearing. The court did this "in such plain circumstances" where the evidence demonstrated that there was "no real prospect of a realistic challenge" to the position that the final version of the deed should have been executed, not an earlier draft.
In Teoco UK Limited v Aircom Jersey 4 Limited the High Court held that a buyer gave inadequate notice of certain breach of warranty claims, thereby preventing it from pursuing those claims (worth around £3.5 million). The court held that the buyer did not specify the warranties in respect of which it was claiming, and that it was too "tentative and contingent" in the description of its claims.
The decision in Medhi Khosravi v British American Tobacco plc provides a useful reminder that it can be a risky strategy to seek extensions of time for service of a claim which has already been issued. Such extensions should not be granted lightly and might be set aside at a later date.
The High Court recently granted a worldwide freezing order in favour of certain Cayman mutual funds companies involved in litigation funding against their de facto sole shareholder and director. The court held that the application was not defeated by either a delay of over a year between discovery of the events and application for the relief, or the insolvency of the applicant companies and resulting weakness of their cross-undertakings in damages.
The High Court recently held that the doctrine of repudiatory breach is excluded in multi-party limited liability partnership (LLP) agreements that fall under Section 5 of the Limited Liability Partnerships Act 2000. The decision clarifies a previously uncertain area of law; however, the court did not confirm whether the doctrine would be similarly excluded in the case of a two-member LLP.
The Court of Appeal recently considered the principles that apply to an application for extension of time for compliance with obligations set out in a consent order. In particular, it considered whether it has discretion to extend time limits in a consent order that recorded the terms on which a dispute had been settled and where time was of the essence.
The High Court recently refused a claimant's application for relief from sanctions, finding that the claimant's failure in respect of its disclosure obligations under the relevant provisions of the Civil Procedure Rules amounted to a significant and serious breach of an 'unless' order. This case provides a reminder of the care that needs to be taken when undertaking any electronic disclosure process.
In the recent case of Chopra v Bank of Singapore Ltd the court considered whether the defendants had been validly served with a claim form and, if not, whether to dispense with service. The court also considered other issues relating to the law applicable to the claims in tort and whether the proceedings should be stayed on the grounds of forum non conveniens.
The Court of Appeal recently held that an individual investor was too late to bring a claim in negligence against her financial adviser and could not take advantage of Section 14A of the Limitation Act 1980 to extend the limitation period, as she had constructive knowledge of relevant facts ascertainable during the primary limitation period.
In a recent deceit claim the High Court rejected what it described as an ingenious argument by the defendant, which sought to rely on Gross v Lewis Hillman as establishing a general proposition that where a representation is made by a contracting party which is relied on by the other contracting party in entering the contract, it becomes 'spent' such that it cannot then be relied on by third parties.
The High Court recently considered what was necessary to comply with a provision in a share purchase agreement requiring notice to be given of a breach of warranty claim. The court also considered the circumstances in which acts and omissions (in this case, fraud) by natural persons can be attributed to a company and how damages for breach of warranty should be calculated.
In London Borough of Brent v Kane the court considered an application for the disclosure of legal advice that was alleged to have been given for an iniquitous purpose, such that the benefit of any privilege that might otherwise have attached to the document was lost. The decision is a useful illustration of the court's approach to the iniquity exception where there is prima facie evidence to suggest an iniquitous purpose.
In a recent case relating to an application to discharge a worldwide freezing order, the High Court considered the legal requirements for reliance on hearsay evidence and the weight to be given to such evidence, and whether the existence of elaborate offshore corporate structures can be relied on as evidence that there is a risk of dissipation of assets.
A recent High Court judgment clarifies the application of the 'wills and succession' exclusion under Article 1(2) of the EU Brussels I Regulation. It confirms that a dispute arising in the context of a succession or inheritance situation will not necessarily fall within the Article 1(2) exclusion; rather, the court will consider the principal legal and factual issues of the claim in determining its jurisdiction.
In Energy Venture Partners Ltd v Malabu Oil and Gas Ltd the Court of Appeal endorsed for the first time the accepted criteria that must be satisfied before the court can order an application for fortification of a cross-undertaking in damages. Its endorsement of these criteria provides helpful guidance for applicants seeking such fortification.
In Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4I) Ltd (No 2) the High Court found that the defendant had been unreasonable in its refusal to mediate. However, as it had made a without prejudice save as to costs offer that the claimant had failed to improve at trial, the usual rules on costs applied. The defendant was awarded costs on the standard basis with no reduction.
Generally under English law, once a limitation period has expired it is not possible to bring a new claim that is out of time. However, in certain circumstances the courts may grant permission for a statement of case to be amended to introduce a new cause of action which would otherwise be time barred. A recent Court of Appeal decision provides a useful reminder of the threshold that must be met in order to gain such permission.
The Court of Appeal recently considered whether a dentist's actual and threatened breach of a term in his contract with his practice principal, which required monthly payments for use of the practice, was a repudiation of the contract. The decision reinforces that a party claiming repudiation by the actual or threatened breach of an innominate term must adduce clear evidence of the actual and anticipated effects of the breach.
The Supreme Court decision in Clyde & Co v Bates van Winkelhof has provided welcome clarification of the scope of whistleblowing protection for partners and members of limited liability partnerships (LLPs). The question for determination was whether the claimant LLP member could be considered a 'worker' under the Employment Rights Act. If so, the claimant could claim protection from detriment.
In the recent Vitol Bahrain EC v Nasdec General Trading decision the Commercial Court reaffirmed the need for caution when considering whether to bring foreign defendants within the jurisdiction of the English courts. The judgment illustrates the limitations of the necessary and proper party head of jurisdiction and the English court's reluctance to extend its jurisdiction to claims to which it has no territorial connection.
The Supreme Court's decision in Clyde & Co v Bates van Winkelhof is eagerly awaited by partnerships, limited liability partnerships (LLPs) and those who advise them. The appeal concerned two preliminary points of importance: the scope of whistleblowing protection for partners and members of LLPs, and whether such protection can extend to an individual who principally works outside the United Kingdom.
A recent Court of Appeal decision has provided welcome clarification on the way to dissolve a traditional partnership where one party has repeatedly breached the partnership agreement. However, practitioners are likely to be more interested in the judge's obiter comments regarding the place of repudiation, affirmation and the 'last-straw' doctrine in partnership law.
A recent case illustrates the high threshold that claimants must overcome in order to resist an inquiry into damages following the discharge of a wrongly obtained injunction. The court had to consider whether the defendants' damages claim would fall within the rules on reflective loss – that is, where a loss claimed by a shareholder is merely reflective of a loss suffered by the company, which is not recoverable.
High Court proceedings are governed by the overriding objective of enabling the court to deal with cases justly and at proportionate cost. In appropriate circumstances, this will involve directing that a trial be split on the issues of liability and quantum. However, in a recent case the judge ruled against a split trial, despite the claimant's assertion that costs of around £1 million in expert evidence might be saved by this course of action.
The Supreme Court has allowed an appeal to alter mirror wills, signed by the wrong testators, so that the intended heir may inherit. Lord Neuberger held that the wills should be rectified on the basis that a 'clerical error' had occurred. The judgment has extended the scope of rectification of a will and brought the approach to interpreting a will further into line with the courts' approach to contractual interpretation.
The Court of Appeal recently upheld a High Court decision to strike out a second claim brought against joint tortfeasors that were not parties to an earlier claim which had been compromised by a settlement agreement. The case is a stark reminder to claimants that are the victims of a jointly committed tort to bear the rule on release of joint tortfeasors in mind when compromising their claim.
The court's discretion to stay proceedings in a recent case under Article 28(1) of the Brussels Regulation was triggered by the existence of prior proceedings in another EU member state, which the court concluded was a 'related action' under the regulation. The court refused to exercise this discretion, holding that the existence of an exclusive jurisdiction clause in favour of the English court was a significant factor against the grant of a stay.
The High Court recently considered the extent to which pleadings can be amended to introduce new claims out of time. The decision is a useful insight into the process that the court must undertake in considering whether it is appropriate to allow the introduction of a new cause of action after expiration of the limitation period.
The High Court decision in Proton Energy Group SA v Orlen Lietuva is a warning to all litigators to choose their expert witnesses wisely. Both parties in the case were criticised for their choice of expert witnesses, but for very different reasons. Ultimately, the case provides a dual lesson of the dangers of both not knowing the expert well enough and knowing the expert too well.
The High Court recently considered the 'misnomer' principle and the circumstances in which a contract that on its express terms is made with one company can be construed as having instead been made with a different company. The case serves as a reminder that principles of construction can be invoked to remedy mistakes in contracts only where it is the language, and nothing more, that has gone wrong.
A recent High Court decision underlines the importance for lawyers of taking care when settling disputes. The court considered whether a binding settlement agreement had been made where the parties to a dispute concerning a commission payment had exchanged solicitors' letters agreeing to settle the dispute, but had been subsequently unable to agree the terms of formal settlement documentation to record their agreement.
The government recently published its decision that the United Kingdom would not opt into the European Commission's proposed regulation to establish the power to grant a European account preservation order. Although its aim has been applauded by many, the proposal has been widely condemned as too draconian, offering limited protection for defendants and too little in the way of legal recourse.
The Court of Appeal has upheld the High Court's earlier finding that market practice is admissible as part of the factual matrix which may be considered in interpreting a contractual term, providing a fresh avenue for parties to explore as an aid to contractual interpretation. The case also included an exploration of how and when a court will imply terms into a contract.
The number of new claims launched in the High Court suggests that the increase in substantial, complex litigation following the credit crunch is continuing. Increasingly, claims are being launched against investment banks by institutional investors and other banks that were sold 'toxic' financial products. However, the devastating upsurge in claims that was predicted in the darkest days of the credit crunch has yet to materialise.
Legal professional privilege (which includes litigation privilege) constitutes critical protection for clients, enabling them to obtain legal advice without fear that their communications could be disclosable to third parties or the court. A recent Court of Appeal decision rules out the extension of privilege to legal advice given by accountants - changes to the regime appear unlikely without parliamentary intervention.
Legal professional privilege is an essential protection for clients seeking to obtain full and frank legal advice and to bring or defend legal proceedings. This update is a reminder of the key rules, with a particular focus on the role of in-house counsel and the steps that clients can take to minimise potential issues.
In 2009 two cases, West Tankers and National Navigation, significantly narrowed the scope of an English court to grant an anti-suit injunction against a party located in an EU member state. However, a recent High Court decision clarifies that anti-suit injunctions can still be obtained to restrain proceedings brought outside the European Union in breach of an arbitration agreement.
The latest update to the Civil Procedure Rules implements several significant changes. The introduction of the Electronic Working Scheme in several courts provides for the electronic filing of most court documents. Other changes affect costs proceedings, instructed representatives and time limits for filing documents and serving applications.