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Legal Developments in the The Legal 500 United Kingdom 2011
Property and telecoms: easy money, but at what risk?
It is estimated that in 2009 there were in excess of 70 million mobile phone connections in the UK.
Mobile operators each divide the UK into ‘cells’. Each cell contains a ‘base station’ (usually a mast or tower with apparatus) from which the signal is transmitted in due course to the telephone network of the recipient. It was estimated that at the end of 2009 there were 52,500 base stations in the UK.
Base stations can only handle a finite amount of traffic and increasingly mobile phones support many additional services, such as SMS, e-mail and internet access. One operator recently reported that 97% of its mobile phone traffic is now data rather than phone calls.
Dilapidations procedure: the latest position
Over the past 12 months there has been much debate in the dilapidations world surrounding procedural aspects of making or defending dilapidations claims. While, to some followers of this debate, it might be unfortunate that discussions have centred around procedural rather than substantive issues, a knowledge of appropriate procedures for dilapidations is important nonetheless. Not following the correct procedures, or not understanding what they entail, can elongate the claim and be, at best, the source of professional embarrassment and, at worst, a cause for an extra costs liability for the defaulting party in question (see Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2008]).
Adjudication: caught in the Act?
Anyone not involved in what might be regarded as the mainstream of the construction industry (whether as a building contractor or someone who regularly employs one) would be forgiven for thinking that a dispute resolution procedure introduced to rid the industry of some of its historical problems is of no relevance to their business.
Property litigation:breaking up is hard to do
In the current market, tenants increasingly seek to exercise break clauses of over-rented and unwanted properties, but in so doing have encountered resistance from landlords. Three recent High Court and Court of Appeal decisions underline the difficulties a tenant faces in attempting to effect a break clause in a commercial lease. This article will examine these cases and summarise some of the lessons learnt from case law, particularly in respect of service of the break notice and compliance with conditions.
Health, safety and environmental management: the cost of getting it wrong
Health, safety and environmental management is increasingly at the top of the corporate agenda. With many companies putting the environment and safety at the heart of their corporate social responsibility policy, the consequences of falling foul of the law are becoming all the more significant, not just in terms of financial liabilities but, more importantly, in relation to brand reputation. While consistency of approach to sentencing remains a problem for everyone who practices in the field of health and safety, the courts are increasingly imposing penalties for offences in this area. Environmental penalties are also on the increase and a convergence of approach is beginning to develop in the principles of sentencing for health, safety and environmental offences. There are two recent developments that anyone concerned with the management, governance or brand protection of a company should be aware of. This article looks at Sentencing Guidelines Council (SGC) guidelines (the Guidelines) on corporate manslaughter, and health and safety offences causing death, specifically in relation to the Court of Appeal decision in the Environment Agency prosecution, R v Thames Water Utilities Ltd [2010].
Making certainty certain: the operation of settlement offers under CPR 36
One of the main factors behind many settlements of civil claims is that settlement will achieve certainty for the parties. Further, the settlement of civil disputes is encouraged at every stage of the litigation (and pre-action) process. Parties to disputes have also been equipped by the Civil Procedure Rules (CPR) with powerful settlement weapons, in the shape of formal offers under Part 36 of the CPR, with which to apply pressure to their opponents to settle. There has been a series of decisions about the operation of Part 36 since its inception and, in the past 18 months, several cases concerning the validity of offers and purported acceptances have been before the court.
Workplace mediation: an overlooked method of dispute resolution
Lord Justice Jackson, in his recent report on litigation costs (‘Review of Civil Litigation Costs: Final Report’), lamented the under-utilisation of alternative dispute resolution (ADR) – and especially mediation – in civil litigation. Increasingly, the cost-effectiveness of mediation as a tool for dispute resolution is being recognised by the government. The added benefit of workplace mediation is its unique ability to help parties surmount stress and anxiety to regain control of their identity at work. It really is a win/win situation for employers and their staff.
This article discusses why the use of mediation to resolve workplace disputes has not yet come of age and the benefits to organisations of using mediation to resolve such disputes. It also discusses the meaning of confidentiality in the light of Farm Assist Ltd (in liquidation) v The Secretary of State for the Environment, Food and Rural Affairs (No 2) [2009].
Top ten really useful cases of 2009
If you want your panel solicitor to‘get off the fence’, need to know when a cause of action accrues or wondered whether the judiciary live in the 21st century, the following cases from 2009 provide some really useful guidance. With professional negligence claims on the increase, whether you are giving or receiving legal advice, the cases discussed below highlight practical points for all legal advisers to be aware of.
Fire safety: a burning legal issue
Heralded as the biggest overhaul of fire safety legislation in 40 years, the Regulatory Reform (Fire Safety) Order (FSO) 2005 was introduced in April 2006 with the intention of streamlining existing legislation, reducing the burden on business and improving safety by allowing fire authorities (the bodies responsible for fire brigades in each area) to concentrate on high-risk premises; all of which are laudable aims. But over three years on what’s been the reality?
‘Boiler plate’ dispute resolution provisions: a trap for the unwary
In the recent Commercial Court case of Shell Egypt West Manzala GmbH & anor v Dana Gas Egypt Ltd (formerly Centurion Petroleum Corporation) [2009] the Court held that a provision in an arbitration clause that ‘the decision of the arbitrators… shall be final, conclusive and binding’ was not sufficient to exclude the parties’ right of appeal to the court as set out in s69 of the Arbitration Act 1996 (the 1996 Act).
Clarifying the law on limitation periods
The Limitation Act 1980 (the 1980 Act) and certain specific statutes set out the law in respect of the defence of limitation and the timelines within which claims may be brought. There is no principle of limitation of common law and in the absence of any relevant provision in the 1980 Act, no limitation period will apply, although the doctrine of laches may prevent successful pursuit of an action.1 The 1980 Act has been subject to several reforms over the years and many consider this area of the law to be unnecessarily complicated.
Say it like you really mean it: exclusion clauses
In the recent case of Internet Broadcasting Corporation Ltd (t/a Nettv) & anor v Mar LLC (t/a MarHedge) [2009] the High Court held that perhaps, despite what the parties had agreed in words, an exclusion clause that excluded all claims to loss of profit would not be effective in circumstances where the party relying on it had inexcusably terminated the agreement early.
Litigating financial markets disputes: do we have a deal?
Until very recently no other sphere of commercial activity could match the financial markets for the size, volume and speed of their dealings. Trades involving enormous sums are often negotiated and agreed within the space of a few short telephone conversations, or during the course of a single evening, by sophisticated professional traders experienced and versed in the customs of the particular market. Often the broad commercial terms of a transaction are negotiated and it is left to the parties’ legal advisers to supply the detailed terms on which the deal is to be done.
No duty to save you from yourself
The recent case of Graham Calvert v William Hill Credit Ltd [2008] examined the difficult issue of whether bookmakers can be liable to their customers for failing to implement steps to protect them from their own actions. Daniel Silver considers the recent Court of Appeal judgment.
Claims without contract: economic torts come of age
If your business has been harmed by a competitor that has persuaded others to renege on their contractual obligations to you, or pressured or conspired with others to interfere with your interests, then a claim based on one or more of the economic torts might be for you.
Confidentiality in international arbitration
How essential is confidentiality in international arbitration? In considering this, two distinct aspects of the nature of confidentiality in arbitration require examination. The first stems from the fact that arbitration is a closed process and it is implicit that strangers shall be excluded from it.
Boilerplate with bite
A number of recent decisions have highlighted two aspects of ‘boilerplate’ clauses to which parties will be held strictly: dispute resolution mechanisms and jurisdiction clauses. It is essential that those negotiating complex contractual arrangements consider and understand these clauses and are satisfied that the scope of them is appropriate in the circumstances. For those dealing with a dispute arising under an agreement with relevant clauses, it is important to consider their impact at an early stage. Failure to do so can be costly and time-consuming. It could also hand an early court victory, and therefore a tactical advantage, to the other side.
Claims arising from the current liquidity crisis: deal or no deal?
NO MATTER HOW STRONG YOUR CLAIM, THERE IS often little to be gained in suing a party without deep pockets. This is a lesson of greater significance in the current market conditions. It appears to be well understood by both investors and their lawyers. There is an increasing focus on ensuring that any potential claim, arising out of the current liquidity crisis, is directed against or involves entities that can provide meaningful compensation.
Expert determination:: an effective tool?
EXPERT DETERMINATION IS AN ALTERNATIVE METHOD of dispute resolution that is frequently used for disputes where there is a requirement for technical expertise, for example, in the IT, accountancy or construction fields. It is not, however, confined to specialised areas, and can be deployed in a wide range of disputes where the parties prefer a quick and confidential determination rather than undertaking comparatively expensive and protracted court or arbitration proceedings.
Europe’s changing mediation landscape
ON 21 MAY 2008 THE EUROPEAN PARLIAMENT AND the Council of the European Union adopted Directive 2008/52/EC. The Directive makes arrangements for the promotion and use of mediation in certain civil and commercial matters. The Directive is the result of an extensive process of consultation and consideration, which started with the Council in May 2000, continued with the European Commission presenting a Green Paper on alternative dispute resolution in commercial law in April 2002, and concluded with extensive debate and negotiation between the Commission, the Council and the European Parliament.
Damages: OFT case offers cold comfort on penalty clauses
BEFORE ESTABLISHING WHETHER IT IS ECONOMICALLY viable to bring proceedings for breach of contract, consideration must always be given to the amount of damages likely to be recovered and, in particular, whether there are any provisions that affect the level of damages available – or, indeed, which provide for an agreed level of damages. If there are such clauses, consideration must always be given to whether they are in fact unenforceable on the basis that they fall foul of the common law rule against penalties.
Conditional fee agreements: a change in the UK litigation landscape
WE LIVE IN FAST-MOVING TIMES. THE SLUMP IN US house prices last year, and the consequent collapse of the US sub-prime mortgage market, has already had a severe global impact and led to investment bank write-downs and the notorious ‘credit crunch’. The current victims of this liquidity crisis, encompassing both corporate entities and individuals, are well-known. The recent negotiations between Bear Stearns and JP Morgan, whereby the latter has sought to purchase the entire share capital of the former for $2 a share when only a year ago such shares traded for $170, suggest that there will be further victims.
Litigation and internal investigations sub-committees: safeguarding privilege
In most larger company litigation and internal investigations, directors of the board are appointed to a sub-committee formed specifically to deal with the litigation and report major findings, or defer major decisions, to the board. Typically, a sub-committee will comprise the legal director, the finance director and the commercial director of the relevant business stream. They run the day-to-day litigation, liaise with external lawyers, and may give a periodic update to the board.
Litigation costs: recent developments
Litigation has the potential to result in considerable expenditure for parties. Solicitors face substantial difficulty in preparing costs estimates because, by its very nature, litigation can be unpredictable. Indeed, a costs estimate prepared at the beginning of a case can quickly become out of date as certain events occur – for example: disclosure becomes more complex; the case requires a heavy exchange of correspondence; extra witnesses are needed; the parties decide to appoint more experts; or the parties need to make additional applications to court.
Corporate reputation: how to protect your biggest asset
It is essential in today's fast-moving environment for corporations to be able to respond swiftly to threats to their reputation. In addition, they need to be conscious of the full range of remedies that are available. This is particularly the case where the damages for defamation no longer reflect the ‘heyday’ of London as the defamation capital of the world. Rapidly rising legal costs and declining awards are just some of the factors to weigh up when taking the decision as to whether the spotlight of publicity occasioned by the commencement of proceedings and a subsequent trial will make matters better or worse. If information does reach the press it is absolutely critical for corporations to have in place a process for pooling their legal and PR expertise – reactions in those early days can be critical in determining the portrayal of the position and the new armoury, in the form of the developing law of privacy, can be used to assist.
Is privilege still a substantive legal right
Has the effect of new government plans and legislation, together with the recent approach of the judiciary in the UK and the EU, affected the provision of legal advice by diminishing the role played by privilege? This article considers recent developments that have impacted on the rules of privilege at both UK and European level, and in particular:
The use of damages clauses to enforce arbitration agreements
Recently there has been a furore surrounding the application of the anti-suit injunction in Europe. This has led many practitioners to assume the worst for the European Court of Justice’s (ECJ) forthcoming consideration of West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA and others (the Front Comor). It is widely believed that, for intra-European disputes, parties will no longer be entitled to an injunction to restrain proceedings brought in breach of an arbitration agreement. They will instead have to wait for the court ‘first seised’ (ie the wrong court) to dismiss the action, as required under EC Regulation 44/2001 (the Regulation), which addresses judgments and jurisdiction.
EC merger control: how in-house lawyers and their competition counsel can make use of arbitration
Over recent years, the European antitrust regulator, the European Commission in Brussels, has initiated a practice of using arbitration commitments to clear cross-border acquisitions within the internal market. In-house lawyers and their competition counsel are often not aware of these developments and the benefits that can be obtained from using international arbitration clauses as a monitoring tool for behavioural commitments with a view to securing clearance of a proposed merger from the Commission.
Drafting arbitration clauses – the international considerations
As readers are no doubt aware, there are many methods available for companies to resolve disputes with their contractual counterparties. These range from a variety of non-binding mediation techniques to the more established and most common way of resolving disputes: litigation. Within this spectrum, arbitration is by far the most developed form of alternative dispute resolution, carrying international recognition in a way that litigation in national courts may not. In this article we aim to provide some practical guidance on how parties that have chosen to resolve disputes by arbitration can ensure that disputes are resolved in the way chosen by them without uncertainty, delay and expense.
Breaking up is hard to do - severing contracts between principals and agents
Most parties involved in an agency relationship, whether they are the principal or agent, will be aware of the impact of the Commercial Agents (Council Directive) Regulations 1993 (the Regulations) on their commercial arrangements.1
Mediation gets results for in-house lawyers
Mediation is a powerful tool to use as part of an effective risk-management policy. It is of great help to in-house lawyers, who constantly need to manage risk and keep costs down. When there is an operational or systemic breakdown, the in-house lawyer will look for a speedy solution to disputes with as little disruption to the day-to-day running of the business as possible, whilst restoring working relations and profit margins. Furthermore, for a business to stay ahead in a competitive market and fill investors with confidence, it needs to have a sound comprehensive risk-management policy that will proactively head off dislocation and therefore save costs.
Promises, promises - judicial review, a change of plan and other considerations
In February 2007 Greenpeace successfully challenged the DTI's decision to include ‘nuclear new build' in the UK's future energy strategy. As a result of Sullivan J's ruling in that case, the DTI has now promised a new round of public consultation on the future of nuclear energy, which will inevitably impact on its energy timetable and the implementation of any new strategy.
Criminalising market abuse - the shifting sands of enforcement by the FSA
Only a tiny minority of people engage in fraud and/or money laundering, and few professionals in the financial markets, or indeed in the wider corporate marketplace, would consider that what they do during their working hours could conceivably lead to a criminal prosecution.
E-disclosure - more change ahead?
Back in September 2005, new court rules came into force which addressed ‘e-disclosure' for the first time. There was a fair deal of discussion about what effect those changes would have (see for example IHL136, p72-76). Now, with the benefit of hindsight and experience, what can be said about the impact of those changes? In the past 18 months have people undertaken e-disclosure differently? Or did the changes simply reflect the existing practice and do no more than generate column inches in the legal press?
Derivative claims under the Companies Act 2006
The implementation of the Companies Act 2006 (the Act) has finally begun. Certain provisions of the Act came into force on 1 January 2007 with a number of further clauses to follow throughout 2007. It has already attracted immense media focus. It has been heralded as comprehensive legislative means both to strip away outmoded administrative obligations imposed on companies and to protect shareholder rights. It addresses a number of further issues within its 1,300 clauses and its scope is generally regarded as going beyond prior Companies Act legislation.
Freezing orders revisited
The previous article entitled ‘Freezing orders in support of foreign proceedings' drew on a practical example of a recent case in which SJ Berwin had been involved in order to demonstrate the ambit of relief that may be able to be obtained in such an order. Nicola Bridge and the author of the article, Kent Dreadon, acted for the claimants in that matter. Since the article was published, a judgment has been released in respect of the case (Cinar Corp and others v Panju), which establishes an important point of principle that is worth noting.
Outsourcing and injunctions
The recent Commercial Court decision in Vertex Data Science Ltd v Powergen Retail Ltd has given useful guidance on remedies available to parties where termination is threatened of a high-value, complex outsourcing contract. Although the decision dealt specifically with the issue of whether an injunction is appropriate in such circumstances, it also provided a useful point of reference when looking at the effectiveness of the dispute resolution methods envisaged in such contractual relationships.
Freezing orders in support of foreign proceedings
As a result of Business having become increasingly global, large commercial disputes have grown more complex and international, and defendants have far greater opportunities to dissipate their assets to defeat an eventual judgment. An interesting and important aspect of this development is the use of interim relief to help parties resolve such disputes. One important form of interim relief to bear in mind in this context is a freezing order in support of foreign proceedings.
Privilege: a practical guide to the courts’ current approach
This article summarises the current position in relation to the three types of privilege most often encountered in commercial practice: legal advice privilege, litigation privilege and without prejudice privilege. For each type, a short case study is provided, which is based on the author's own experience and highlights some of the issues that can arise.
Investment advice and freezing orders:banks’ duties of care to customers and third parties
The past couple of years or so have been rocky for the banking fraternity. When it comes to deciphering the ambit of their duties to customers and third parties, the courts have not always seemed consistent. Add to that the ever-changing (and increasing) statutory duties imposed on banks, and it is not surprising that business at the Royal Courts of Justice has been brisk.
Entire agreement clauses – a necessary evil?
In several recent cases, judges have acknowledged that the existence of an entire agreement clause may lead to an injustice between the parties, but have nevertheless felt bound by them. This article examines these cases and considers whether it is always desirable, or appropriate, to include entire agreement clauses in contracts.
Freezing assets – a practical guide
Bringing a claim against a defendant without funds is futile. The worst scenario for a claimant who has successfully pursued an action is to discover that the defendant has disposed of all his assets and possesses nothing against which the claimant can enforce his judgment. Before making a claim it is crucial, therefore, to consider whether the defendant has sufficient assets to meet any judgment and, if he does, whether there is any risk that he will dispose of them before the judgment is satisfied.
ADR post-Halsey: recent amendments to the CPR further encourage mediation
The 41st update to the CPR came into force on 6 April 2006. It amended the ‘Practice Direction – Protocols’ and most specific pre-action protocols to further encourage the use of ADR at an early stage.
A little knowledge is a dangerous thing: the demise of warranty claims post Infiniteland Ltd
The recent decision of the Court of Appeal in Infiniteland Ltd and another v Artisan Contracting Ltd and another has important consequences for the way in which share sale and purchase agreements are drafted. From now on, negotiating and documenting the terms of any vendor warranties will be much more time-consuming and complex for all concerned. Even more time-consuming and complex will be the process of documenting the scope of any disclosure to be given by a vendor against those warranties (disclosure here in the sense of qualifying the accuracy or truthfulness of the warranties given by a vendor).
Dishonesty in the assistance of a breach of trust: a state of mind?
A man had been overpaid by a bookmaker. He knew that the bookmaker had made a mistake, and that he was not entitled to the money. But he kept it. The case for the defence was that
Liability to third parties and clients: are auditors watchdogs or bloodhounds?
Auditors have had an uncertain time over the past year, the high-value claims against KPMG and Ernst & Young being the higher-profile examples of this. Some commentators have even drawn parallels with the demise of Arthur Andersen in the wake of Enron, and spoke of the Big Four accounting firms being reduced to the Big Two.