BHL v. Leumi ABL Limited: Collection Fees Charged Under Factoring Agreements

INTRODUCTION

BHL v. Leumi ABL Limited [2017] EWHC 1871 (QB) is a factoring case which was decided at the end of July 2017 by the High Court of Justice, Queens Bench Division, in London, England. Although the decision is not binding on the Canadian courts, it raises some interesting questions of law that may apply to factoring agreements in Canada.

FACTS

1. Leumi ABL Limited (the "Factor") entered into a factoring agreement with Cobra Beer Limited ("Cobra").
2. After Cobra began to suffer financial difficulties, Cobra's parent company BHL (the "Parent") signed an indemnity agreement in favour of the Factor, pursuant to which the Parent agreed to indemnify the Factor for all amounts due under the factoring agreement.