Simon Hart
Updates
Litigation
Privileged but admissible? When can without prejudice material be pleaded in statements of case?
United Kingdom | 23 June 2020In a recent decision the High Court considered the scope of the existing exceptions to the without prejudice rule. This well-known rule protects communications made in a genuine attempt to settle an existing dispute from later deployment in court. The High Court allowed passages from papers prepared for a mediation to be admitted into the proceedings under two exceptions to the without prejudice rule.
What are good grounds for appeal in insolvency applications?
United Kingdom | 05 May 2020Applying for permission to advance new evidence on appeal is a complex application which has had varying degrees of success in the courts. A recent decision is a useful example of the application of the criteria in the context of insolvency proceedings. This case clarifies that if unreliable evidence is put before the court, decisions based on that unreliable evidence can be challenged on appeal or by a new action being brought.
Witness evidence reform: evolution not revolution?
United Kingdom | 21 January 2020Concern that current practice in relation to factual witness evidence does not achieve the best evidence at proportionate cost prompted the creation of the Witness Evidence Working Group to consider how the current practice could be improved in the business and property courts. The group's recommendations focus on the more consistent enforcement of existing rules with some limited new measures.
World freezing orders: recent dissipations and reasonable delays
United Kingdom | 15 October 2019The High Court has held that a delay in applying for a world freezing order was not fatal to its continuation at the return date, as the underlying transactions provided solid evidence of a risk of dissipation and the delay in seeking relief was not material and did not evidence the absence of a genuine belief in that risk. While the court may be reluctant to freeze assets on the basis of historic transactions, the ultimate question is whether solid evidence exists of a risk of dissipation even if the trail goes somewhat cold thereafter.
What makes a Quistclose trust?
United Kingdom | 06 August 2019The Court of Appeal recently set out the relevant circumstances in which a Quistclose trust can arise in the context of bank transfers. The decision reinforces the understandable reluctance on the part of the courts to erode the basic principle that a banker-customer relationship is no more than a contractual one of debtor and creditor.
Agent's failure to disclose relevant information: a 'Gauguin-tuan' error?
United Kingdom | 16 July 2019In 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.
What expenditure falls within 'ordinary and proper course of business' exception in freezing orders?
United Kingdom | 25 June 2019The 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.
Defendants need not make reasonable enquiries of third parties where they cannot admit or deny allegations
United Kingdom | 26 March 2019A 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.
Important issues relating to effect and interpretation of non-assignment clauses
United Kingdom | 07 August 2018A 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.
2002 ISDA close-out: reasonable calculation required first time
United Kingdom | 01 May 2018In 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.
Supreme Court clarifies test for liability in tort of conspiracy
United Kingdom | 10 April 2018The 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.
Pre-action disclosure ordered against bank despite putative claim being ostensibly out of time
United Kingdom | 02 January 2018In 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.
UBS, the municipal water company and "the moral standards of the vicarage"
United Kingdom | 07 November 2017The 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.
Erith v Murphy: oral contracts and knowing who you are contracting with
United Kingdom | 15 August 2017The 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.
Goodbye Rainy Sky?
United Kingdom | 18 July 2017Lord 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.
Court of Appeal upholds Financial List decision on application of Rome Convention to derivative instruments
United Kingdom | 10 January 2017The Court of Appeal recently unanimously upheld a Commercial Court decision from the first trial heard within the new Financial List. The decision provides further clarification on the application of the Rome Convention to derivative instruments, including in relation to the inconsistent approach between the decision in this case and the earlier decision in Dexia, and signals a strong start for the Financial List.
High Court hears claim against Goldman Sachs for undue influence and unconscionable bargains
United Kingdom | 15 November 2016The High Court recently dismissed the Libyan Investment Authority's claim against Goldman Sachs International based on two causes of action: undue influence and unconscionable bargains. The case is interesting because it applies the concepts of actual and presumed undue influence in a commercial and business context, illustrating ways in which the relationship boundary between bank and client may cross from a normal counterparty relationship to a protected relationship.
Technology-assisted review in civil proceedings: the exception or the norm?
United Kingdom | 26 July 2016Hot on the heels of its first endorsement of the use of predictive coding in the widely publicised Pyrrho decision in February 2016, the English court recently ordered the use of predictive coding in circumstances where its use was opposed. The judgment is likely to advance the discussion around the use of predictive coding, which has been one of this year's litigation hot topics.
Court of Appeal highlights long-term nature of contract in considering 'in writing only' variation clause
United Kingdom | 12 July 2016The Court of Appeal was recently asked to consider the correct contractual interpretation of a long-term supply agreement. In its judgment, the Court of Appeal indicated obiter that including an 'in writing only' variation clause in a contract does not prevent subsequent variation of the contract orally or by conduct in certain circumstances.
High Court allows claim against foreign subsidiary and English parent to be heard in England
United Kingdom | 05 July 2016The High Court has rejected applications by an English parent company and its Zambian subsidiary that claims brought against them in London should be dismissed in favour of proceedings in Zambia. The claimants benefited from the recast EU Brussels Regulation's provision that an EU-domiciled defendant can be sued in its state of domicile and a recent court decision that parent companies can be liable for the activities of their foreign subsidiaries.
Don't gamble on a wager
United Kingdom | 19 April 2016In WW Property Investments Limited v National Westminster Bank plc – one of many interest rate swaps claims that have been made since the global financial crisis – the High Court confirmed, in line with previous decisions, that interest rate hedging agreements are not wagers in law where at least one party entered into the contract for a genuine commercial purpose and not to speculate.
The recast EU Brussels Regulation – considering exclusions
United Kingdom | 15 March 2016The High Court recently considered jurisdictional issues relating to a claim concerning the claimants' entitlement to certain shares held by a deceased businessman. An argument arose as to whether the claim fell within the scope of the 'succession' exclusion in Article 1(2)(a) of the EU Brussels Regulation. The decision confirms that exclusions in the Brussels Regulation should be construed narrowly.
A (bright) green light for predictive coding in disclosure
United Kingdom | 23 February 2016A recent interlocutory judgment endorses, for the first time, the use of predictive coding when conducting disclosure in English civil proceedings. For those involved in complex litigation with vast numbers of documents, the judgment is likely to provide the comfort needed to allow serious consideration to be given to the use of predictive coding, which previously had perhaps been seen as a riskier and less defensible alternative to linear reviews.
'Disproportionate' disclosure application denied in swaps mis-selling claim
United Kingdom | 26 January 2016The Commercial Court recently rejected an application by the claimant for specific disclosure against the defendant bank. The court found that the documents sought, which related to other mis-selling allegations against the bank employees featuring in the claimant's case, would have little probative value and adducing them would place a disproportionate burden on the defendant.
High Court clarifies scope of duties owed by directors to shareholders
United Kingdom | 01 December 2015The High Court has struck out a number of claims brought by shareholders in what was, in 2008, Lloyds TSB against its directors. The claims alleged that the directors owed fiduciary and tortious duties in the context of providing information to shareholders and in seeking their approval of a transaction which resulted in Lloyds TSB's takeover of HBOS in November 2008.
High Court rules on accountability of assets following breach of fiduciary duty
United Kingdom | 13 October 2015The High Court has ruled that a principal may elect to take the value of assets rather than the assets themselves following a breach of fiduciary duty, and that the burden of proof lies with the fiduciary to prove that he or she has no interest in an asset. The case serves as a reminder to directors and agents of their fiduciary duties.
Effectiveness of US exclusive jurisdiction clause in light of recast Brussels Regulation
United Kingdom | 06 October 2015The Court of Appeal has ruled that a company which provides benefits to employees of associated group companies may be regarded as an employer if it provides those benefits to reward and encourage the employees for the benefit of their employer and the group as a whole. The decision gives a wide interpretation to the meaning of 'employer' under the recast EU Brussels Regulation.
No way out: English courts wary of re-writing 'bad bargains'
United Kingdom | 28 July 2015The Supreme Court's recent decision in Arnold v Britton provides a salutary reminder of the reluctance of the English courts to re-write 'bad bargains', even if they have catastrophic unforeseen commercial outcomes for one of the contracting parties. This is in stark contrast to the more lenient approach taken by some courts in civil law jurisdictions.
One-stop adjudication – the rational approach to dispute resolution
United Kingdom | 09 June 2015The Commercial Court has found that an arbitration clause in a consultancy services agreement was superseded by a dispute resolution clause in a later settlement agreement, and that the dispute resolution clause should apply to disputes arising from both agreements. The court applied the presumption for 'one-stop adjudication' – the presumption that rational businesspeople will wish to resolve all disputes in one forum.
High Court emphasises interpretation of contractual terms as a whole
United Kingdom | 17 February 2015The High Court has upheld a building society's right to raise the margin over base rate for tracker mortgages in light of poor market conditions and to carry out its business prudently, efficiently and competitively. The case considered the interpretation of two allegedly conflicting contractual terms regarding the right to vary interest rates.
No discretion to extend time to appeal registration of foreign judgments
United Kingdom | 27 January 2015The High Court recently held that the English courts have no power to extend the time for appealing against the registration of a foreign judgment under the EU Brussels Regulation. Although the new regime under the recast Brussels Regulation is now in force, the original Brussels Regulation will still apply to many cases for a number of years and this decision provides welcome clarity for such cases.
Bribery finding sinks UBS litigation against German water company
United Kingdom | 23 December 2014The High Court recently dismissed claims brought by UBS AG against Kommunale Wasserwerke Leipzig to enforce its purported right to payments owed under complex derivatives contracts issued by the bank. In many respects, the facts of this case are extraordinary and, as the judge stated in his concluding remarks, "a case study in how not to conduct investment banking in a fair and honest way".
Use of contractual estoppel for additional representations to ISDA Master Agreement
United Kingdom | 04 November 2014The High Court has held that 'additional representations' in a Schedule to the International Swaps and Derivatives Association Master Agreement relating to a counterparty's ability to enter into derivative transactions were enforceable warranties. The court held that breach of these warranties led to a contractual estoppel. This novel application of contractual estoppel is an important precedent for finance lawyers and banking litigators.
Jurisdiction tussle shatters reflective loss claim
United Kingdom | 02 September 2014In Baturina v Chistyakov the claimant – reportedly Russia's richest female oligarch – challenged a ruling that her claim against the defendant should be stayed in favour of the Russian courts. The Court of Appeal considered whether the stay should be set aside. This case illustrates the complexities that can arise in making claims based on the reflective loss principle, which is a relatively unclear and developing area of English law.
Crime and privilege
United Kingdom | 26 August 2014Under English law, legal professional privilege permits a civil litigant or a defendant in criminal proceedings to withhold from the other side documents subject to the privilege. Although privilege is a well-established concept, its boundaries are sometimes difficult to determine in practice. A recent High Court judgment provides insight into the so-called 'fraud exception' to privilege.
Imposition of conditions on ability to pursue application for permission to appeal
United Kingdom | 12 August 2014In a recent judgment the Court of Appeal found compelling reasons to require the defendant to pay the judgment sum and other amounts into court as a condition of its pursuit of an application for permission to appeal. The case serves as a reminder of the issues that the court will consider when determining whether to impose conditions on a party before considering an application for permission to appeal a first-instance decision.
Assessing compensation under cross-undertakings in damages
United Kingdom | 17 June 2014The Court of Appeal recently considered a claim for compensation under a cross-undertaking in damages by respondents to a wrongfully obtained freezing injunction. In doing so, the court gave useful guidance on how the level of such compensation should be determined and the principles governing the process.
Court considers estoppel by acquiescence and contractual meaning of 'the purpose'
United Kingdom | 10 June 2014In Starbev GP Ltd v Interbrew Central European Holding BV claimant Starbev and defendant Interbrew Central European Holding – a subsidiary of Anheuser Busch InBev – sought declaratory relief from the High Court for various issues relating primarily to points of contractual construction arising from the sale of the latter's business to the former. The court's judgment provides a masterclass on contractual interpretation.
Jurisdiction in tort claims: the indirect answer to the refrain "Where's the harm?"
United Kingdom | 13 May 2014The Commercial Court recently considered whether it had jurisdiction over a claim against a firm of German lawyers. The case offers an interesting clarification of the rules for jurisdiction over tort claims when the damage pertains to the loss of a contractual right. It may also be a sign that the court is increasingly willing to expand the application of Article 5(3) of the EU Brussels Regulation for the establishment of jurisdiction.
When within Rome I or II, do as your EU counterpart might do – but not exactly
United Kingdom | 11 March 2014The Court of Appeal recently considered the application of the EU Rome II Regulation on the law applicable to non-contractual obligations. In particular, it examined the extent to which Rome II imports foreign law and procedure into the English courts in cases where that regulation applies, and the scope and meaning of 'law' in that context.
Silence can be expensive: the dangers of ignoring an opponent's ADR request
United Kingdom | 12 November 2013A recent Court of Appeal decision has extended the guidelines set out in Halsey v Milton Keynes General NHS Trust concerning whether an unreasonable refusal to engage in alternative dispute resolution (ADR) justifies the imposition of a costs penalty. The court held that failure to respond to repeated invitations to participate in ADR is inherently unreasonable and should attract a costs penalty.
Clipping the wings of Norwich Pharmacal jurisdiction
United Kingdom | 10 September 2013The Court of Appeal recently clarified the circumstances in which Norwich Pharmacal relief is available. The decision emphasised the necessity, in order to fall within the jurisdiction of the relief, for the relevant third party to be mixed up or involved in the wrongdoing that it has facilitated. The further delineation of the jurisdiction underscores the need for parties to consider carefully the relevant wrongdoing in a given case.
Court of Appeal considers extent of fiduciary duties in joint venture agreements
United Kingdom | 03 September 2013The Court of Appeal recently considered the circumstances in which individuals who control companies owe fiduciary duties to third parties that deal with their companies in the context of a joint venture agreement, and whether causing a company to incur legal costs to defend a claim may itself amount to a breach of duty. The case highlights that joint ventures can impose greater responsibilities on the parties than they bargained for.
