Jurisdiction(s):
United Kingdom

Causation and mitigation in spread betting: no duty to protect customers from self-inflicted losses absent clear express terms—Ehrentreu v IG Index, Court of Appeal (England and Wales)

Published on: 13 February 2018

Published by a LexisNexis Dispute Resolution expert

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Article summary

Ehrentreu v IG Index Ltd [2018] EWCA Civ 79 What are the practical implications of this case?

The judgment underscores that only very clear and express contractual language will suffice before a court will conclude that a party has undertaken an obligation to safeguard another from harming themselves. In particular, the court held that the appellant’s decision to remain active in the relevant market and to keep his bets open was a deliberate choice made by him, and stood apart from any breach of the Customer Agreement by the respondent. Whether approached as an issue of causation or of a failure to mitigate, it was that decision, rather than the breach, which produced the loss. Moreover, the respondent had not assumed responsibility for the risks inherent in the appellant’s continued speculation. The Court of Appeal considered that instances where contracts contain the necessary express terms that set out a duty to protect a counterparty from their own actions will be very uncommon. It further observed that, so far as the law of tort is concerned, the existence of...

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