Legal News

Pakistan International Airline Corporation v Times Travel ( UK) Ltd [2021] UKSC 40 What are the practical implications of this case? This Supreme Court ruling delivers a timely and thorough reassessment of the law on lawful act economic duress. Divergent judicial approaches in the case underscore the area’s complexity and challenge. The claim of lawful act duress prevailed at first instance, but the Court of Appeal reversed that outcome. The Supreme Court affirmed the Court of Appeal, though only one Justice, Lord Burrows, adopted its reasoning. The majority advanced a different analysis yet ultimately agreed that this was not a case of lawful act economic duress. The extent of disagreement is regrettable, given the core question: how far parties in commercial bargaining may leverage inherent advantages to obtain a stronger negotiated position from a weaker counterpart. That is a practical concern...

ABC v The London Borough of Lambeth [2021] EWHC 2057 ( QB) What are the practical implications of this case? The practical effect of this ruling is that a claim form uploaded on CE-file can be treated as filed at the point of its initial upload and payment of the court fee, even if the document later had to be re-lodged owing to ‘procedural’ defects. The ruling is tightly confined. It applies where the claimant has obtained an anonymity order before filing the claim, and the claim form is not lodged with the application or the sealed order. It remains prudent for any party to file before the end of any limitation period. A claim form affected by ‘procedural’ defects may still be regarded as filed earlier. However, the judgment does not offer (and does not purport to offer) any further steer on which kinds of...

Maypole Dock Ltd v Catalyst Housing Ltd [2021] EWHC 1742 ( TCC) What are the practical implications of this case? This was a relatively unusual application, namely to curtail the continuation of an expert determination. While there are several reported decisions where injunctions were pursued to halt adjudications, and both parties relied on those authorities, the court had no difficulty distinguishing them, finding that different considerations arose here. In this instance, one party sought to uphold what it asserted was a contractual entitlement to an expert’s determination, whereas the other wished to engage the court’s jurisdiction. The suitability of an injunction in such circumstances is highly fact specific, yet ultimately falls to be decided in line with the established American Cyanamid principles... What was the background? The dispute originates from Catalyst Housing Ltd’s 2014 purchase of land and buildings in Southall from Maypole Dock Ltd. On...

Brown- Forman Beverages Europe Ltd v Bacardi UK Ltd [2021] EWHC 1259 ( Comm) (19 May 2021) What are the practical implications of this case? The rule from Holme v Brunskill (1877) 3 QBD 495 provides that any material change to the contractual terms between the creditor and the principal debtor releases a guarantor. If a variation has been made, the creditor must demonstrate that the change can only operate to the surety’s advantage, or that by its very character it can never in any situation increase the surety’s exposure. Parties may exclude this rule by agreement, and prudent creditors routinely do so. It has been labelled a snare for the careless creditor. This judgment confirms two significant practical propositions concerning the rule and points to a specific hazard. First, the court reiterates that the rule is confined to guarantees and does not extend to...

Sciortino v Beaumont [2021] EWCA Civ 786 What are the practical implications of this case? This ruling is poised to affect practitioners who advise on professional negligence claims, particularly proceedings brought against solicitors and barristers. Although the Court of Appeal reaffirmed that there is no ‘continuing duty’ to revisit or reassess earlier advice, it decided that a fresh breach of duty may arise on every occasion advice is given, even where it concerns the same point. That approach may assist claimants to pursue negligence actions that might otherwise have fallen foul of limitation. The Court of Appeal also confirmed that, subject to the express terms of the retainer, there is no ongoing obligation to scrutinise past advice for latent mistakes. Where negligent advice gives rise to loss occurring outside the limitation period, the claim will, in general, be time-barred. That outcome cannot be...

Kang and another v Pattar [2021] EWHC 1101 ( TCC) What are the practical implications of this case? The outcome was fact-specific, resting largely on the judge’s consistent preference for the defendant’s testimony and the ensuing conclusions about what had been agreed. Even so, the decision offers clear warnings for parties who arrange and run building contracts by word of mouth and only later commit their arrangements to paper: These observations are directed at parties who agree and perform their building contracts orally, and only afterwards put those contracts into writing. where instructions are routinely delivered to a contractor orally and clash with later written terms or design drawings, the contractor is not automatically in breach for following spoken directions rather than subsequent contract documents. If the later documents are meant to oblige the contractor to remove and remake existing work that conflicts with them, the...

Goshawk Aviation Ltd and other companies v Terra Aviation Network SAS and other companies [2021] EWHC 1029 ( Comm) What are the practical implications of this case? This decision provides a concise survey of the key principles governing applications to serve proceedings outside the jurisdiction and, more generally, by alternative methods. The first question is whether the state in which service is to be effected is a contracting party to the Hague Service Convention or to any bilateral instrument. If no such convention or treaty is engaged, an order permitting alternative service does not threaten to circumvent the terms of any international arrangement. In those circumstances, the court’s task is simply to determine, in light of all the facts of the particular matter, whether there is a sound basis for granting the relief sought. The court ought not to devote...

Balfour Beatty Regional Construction Ltd v Van Elle Ltd [2021] EWHC 794 ( TCC) What are the practical implications of this case? This ruling illustrates the problems that can emerge when a sub-contractor (or indeed a consultant or surveyor) issues its own terms and conditions with an initial quotation for works or services, and the later agreement does not contain an effective entire agreement clause and/or leaves scope to argue that the contractual scope does not cover every aspect of the works actually undertaken on the project. The judge found—by reference to the wording of an LOI entered into after the original quotation, the terms of the sub-contract when concluded, and the parties’ conduct in invoicing—that there was a single contract. Nonetheless, practitioners should ensure inclusion of a clear entire agreement clause that expressly states previous agreements are superseded (see Practice Note: Entire...

Clin v Walter Lilly & Co Ltd [2021] EWCA Civ 136 What are the practical implications of this case? The judgment addresses the correct method for assessing if building operations within a conservation area designated under P( LBCA) A 1990, s 69 amount to ‘demolition’, thereby triggering the need for conservation area consent under P( LBCA) A 1990, s 74. The court confirmed that s 74 poses two distinct issues. First, is a building in a conservation area to be ‘demolished’ such that conservation area consent is necessary? Secondly, if the works do constitute demolition, should conservation area consent be granted? As to the first issue, the ruling makes plain that it is a quantitative assessment, answered by the scale of demolition, and excludes any qualitative appraisal of the effect on the character and appearance of the conservation area. The outcome will aid owners (and their...

What is the WTO government procurement agreement ( GPA)? The WTO GPA is a voluntary, plurilateral pact that obliges its parties to grant one another access to their respective government contracting and public purchasing markets on a reciprocal basis. Through its EU membership, the UK participated in the WTO GPA; the EU constitutes one of the 20 current participants. The UK has now sought independent accession to the GPA in its own right, and a further 22 jurisdictions hold observer status. Signatories are not free to design procurement systems without constraint; foundational principles are embedded within the Agreement and, indeed, many of these shaped the drafting of the current EU procurement rules. What are the key features of the regime? As noted, the GPA is more than a minimal framework. It comprises the Agreement’s main body together with members’ coverage schedules. While the Agreement...

Associates Ltd v Gibbeson [2020] EWCA Civ 1460 What are the practical implications of this case? This decision will interest appeal practitioners, notably those advising where permission to appeal has been refused on the papers, the application has been branded totally without merit, and an order has also been made preventing the applicant from seeking an oral reconsideration under CPR 52.4(3). It concerns scenarios where the court, on paper, concludes an application is wholly without merit and, simultaneously, bars any oral renewal of the permission application. The Court of Appeal reaffirmed two settled points: no appeal lies from a High Court decision to grant or refuse permission to appeal ( AJA 1999, s 54(4)); and the Court of Appeal has no jurisdiction to entertain an appeal from a high court judge’s certification that an application is totally without...

Maeda Kensetsu Kogyo Kabushiki Kaisha (aka Maeda Corporation) v Bauer Hong Kong Ltd [2020] HKA 830 What are the practical implications of this case? The Hong Kong Court of First Instance’s ruling drew attention because the contested notification requirement mirrored provisions in the FIDIC 2017 suite. In particular, clause 20.2.4 of the Red, Yellow and Silver Books obliges a party, when submitting a fully detailed claim, to include a statement identifying the contractual or other legal foundation for that claim. Supplying that statement is a condition precedent to any entitlement. At first instance, the court determined that once a party has specified the contractual basis it relies upon, it is not permitted to later advance a different basis. This approach is of persuasive value in England and Wales. See News Analysis: Hong Kong—effect of notification of contractual basis of claim ( Maeda v Bauer). The Hong Kong...

Medsted Associates Ltd v Canaccord Genuity Wealth ( International) Ltd [2020] EWHC 2952 ( Comm) What are the practical implications of this case? This judgment offers a clear examination of the contractual measure of damages affirmed in One Step ( Support) Ltd v Morris- Garner and another [2018] UKSC 20. It is especially pertinent where a defendant advances a complex or persuasive counterfactual to justify a reduction in damages. The court held that to construct the proper counterfactual one must first pinpoint the relevant contractual obligation and the relevant breach. Speculative possibilities that sit beyond those core issues do not belong within the ‘had the contract been performed’ counterfactual. They are entirely outside the proper scope of the inquiry here. In this dispute, concerning breach of an introducing agreement, the pertinent contractual obligation was the payment of the introduction fee. The pertinent breach was the...

Adare Finance DAC v Yellowstone Capital Management SA and another [2020] EWHC 2760 ( Comm) What are the practical implications of this case? This ruling serves as a convenient and accessible single reference point for practitioners on how to approach applications for summary judgment or strike out in general practice, and on the scope and interpretation of the equitable doctrines of unconscionable bargains, economic duress and penal provisions in particular detail. After a thorough and careful wide-ranging survey of the authorities, Peter Mac Donald Eggers QC, sitting as a Deputy Judge of the High Court, firmly concluded that the defendants could not sidestep their freely negotiated contractual obligations by advancing nebulous allegations of victimisation by Adare. The judgment further emphasises that a litigant who is an experienced businessman with substantial means and access to top-quality legal advice cannot be treated as...

BDW Trading Ltd v Lantoom Ltd [2020] EWHC 2744 ( TCC) What are the practical implications of this case? This case is notable because the hearing occurred the day after CPR 3.15A took effect. The claimant argued that the previous rule ought to govern matters since the significant developments relied upon, together with the correspondence and the application, all pre-dated the amendment. The judge observed that, without a relevant transitional provision, that may not be correct; however, neither side suggested that the altered wording made any difference on the facts. It proved highly advantageous that the claimant had expressly set out its initial expectation regarding the volume of documents it anticipated receiving. Regional Costs Judge Richard Lumb has publicly stressed how critical this can be. By setting the stated assumption against what actually materialises, showing a significant development becomes far more...

Palmali Shipping SA v Litasco SA [2020] EWHC 2581 ( Comm) What are the practical implications of this case? This judgment carries two key consequences. First, Foxton J determined that the court can grant summary judgment, on the pleaded approach, for the quantification of damages in a breach of contract, even where the defendant is unable to show that no damages are recoverable at all. A dispute over the proper methodology for assessing loss amounts to a ‘particular issue’ within CPR 24.2. Second, the court considered the so‑called ‘net loss approach’ to damages. Where a claimant bears a legal obligation to third‑party companies for costs incurred in performing the contract, those expenditures must be credited when arriving at the net loss claimed against the defendant, even if those third‑party companies have the same beneficial owner as the claimant and even if, in practice, such...

Introduction The UK’s disapplication of so‑called ipso facto clauses—contract terms allowing a party to end the agreement when insolvency proceedings begin against the other—was made a permanent feature by the Corporate Insolvency and Governance Act 2020 ( CIGA 2020). For deeper commentary on CIGA 2020’s reforms, see News Analysis: Corporate Insolvency and Governance Act 2020—the rise of the moratorium and restructuring plan and the fall of the Scheme? Halting such terminations marks a significant shift in UK insolvency practice. Ipso facto defaults are standard in most formal agreements, save for the briefest or most transitory. Further, English authority has treated a counterparty’s insolvency as repudiatory where it deprives the insolvent of the ability to perform. Statutes invalidating these provisions exist in many jurisdictions. The UK legislation mirrors the conventional model: first declaring...

Contractual interpretation and worked examples— The terms to which the parties have turned their minds ( Altera Voyageur Production Ltd v Premier Oil E& P UK Ltd) The court held that illustrative calculations may serve as a significant tool for construing terms when the drafting has misfired; in a boilerplate, they may encapsulate the very provisions the parties actually considered. Notably, this judgment is only the second reported decision to address the interpretative effect of worked examples. In this dispute, the examples incorporated an extra step in the calculation and so seemed in tension with the contract’s governing clauses; nevertheless, they steered the court towards the real meaning of the parties’ bargain. Written by Lauren Godfrey, barrister, Hardwicke Chambers. Altera Voyageur Production Ltd v Premier Oil E& P UK Ltd [2020] EWHC 1891 ( Comm) What are the practical implications of this case? This decision is of broad...

What are the practical implications of this case? The decision is noteworthy in two respects. First, for those in commerce, it underscores how hard it is, under English law, to depart from the clear, ordinary sense of contractual language. The defendants advanced bold arguments that two terms should be implied so as to avoid the straightforward effect of the express provision at issue—namely that ‘return’ of the materials required their physical handover to the claimants, European Film Bonds AS and other companies ( EFB)—but the court rejected those submissions outright. Second, it clarifies, in this context, the outer boundaries of the penalty clause doctrine in English law. The defendants argued that, if the clauses were construed to require them automatically to acknowledge the film as ‘completed and delivered’ merely because a modest time limit had been missed, the result would be an...

Riverside Truck Rental Ltd v Lancashire County Council— R (on the application of Riverside Truck Rental Ltd) v Lancashire County Council [2020] EWHC 1018 ( TCC) What are the practical implications of this case? The stringent deadlines in public procurement disputes remain a pitfall for those not alert. In the unusual situation where a bidder brings both a Technology and Construction Court claim under the procurement regime and a judicial review, it is crucial to appreciate that the timetabling rules are applied differently across those proceedings. In judicial review, when considering an extension, the court weighs (para [101]): whether there is an objectively reasonable explanation for delay; whether the defendant and/or third parties would suffer prejudice; what the public interest demands. That framework is not mirrored in claims under the PCR 2015. While public interest may feature in judicial review, it plays no part in...