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Dispute Resolution

Defamation - The Importance of a Swift Apology
Tuesday 18th July 2017

Palin - v - The New York Times

Various news agencies have recently reported that the former republican vice-presidential candidate Sarah Palin has commenced legal proceedings in the United States of America against the New York Times for defamation, seeking in excess of $75,000.00 USD.

It is alleged by Ms Palin that the New York Times published a statement which appeared to connect Ms Palin to a 2011 shooting spree which resulted in the deaths of 6 individuals. Ms Palin asserts that the New York Times knew, or ought to have known, the statement to be false. The statement in question was headlined “America’s Lethal Politics” and was published earlier this year on the same day a gunman fired at a group of Republican Congresspersons who were playing baseball in Virginia.

The New York Times issued a correction a day later which stated that there was no connection between Ms Palin and the 2011 incident; however, the newspaper also asserted that the their article was not undercut or undermined by the lack of such a connection. Those acting for Ms Palin allege that the correction “…did not approach the degree of the retraction and apology necessary and warranted by the New York Times’ false assertion that Ms Palin incited murder…”.

In England and Wales, the term "defamation" covers libel and slander. Both concern the publication of defamatory material, that is, something that adversely affects a person's reputation. The distinction between the two is that libel concerns "lasting" forms of publication such as print, online or broadcasting. Slander concerns more transient forms such as spoken words or gestures.  Pursuant to Section 1 of the Defamation Act 2013 a statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the defamed.  This means serious financial harm where the claimant is a body trading for profit.

Depending on the facts of the case, statements which might otherwise have been defamatory and likely to cause serious harm may effectively be neutralised by a swift apology.  In Cooke v MGN the Court considered that an apology published by the newspaper shortly after a complaint was received was relevant to the consideration of whether serious harm had arisen or was likely to arise in the future. In Cooke, the Court ruled that the apology was “…significant in eradicating or minimising the unfavourable impression a reader might have gained…”.

It remains to be seen whether the New York Times correction will go far enough to significantly eradicate or minimise the impression given of Ms Palin; however, this case serves as a reminder of the potential benefit of a swift apology.


UK Supreme Court Revisits Contractual Interpretation Principles
Friday 14th July 2017

Back in February 2016, we wrote about the implications of Arnold v Britton [2015] UKSC 36 on contractual interpretation, after the UK Supreme Court (UKSC) heard three important cases relating to contract law in 2015.

The UKSC has now had further opportunity to clarify the law regarding the interpretation of contracts with the recent case of Wood v Capita Insurance Services Limited [2017] UKSC 24, in a decision which seeks to tie together the various principles of interpretation.

When interpreting the meaning of a clause within a contract, one must consider a number of factors including the natural meaning of the words used; the meaning of the clause (as a reasonable person would understand it) in light of the overall document; the purpose of the document (from a commercial point of view); and the relevant background facts or knowledge reasonably available to the parties at the time the contract was made.

The difficulty lies in knowing which of these factors should take priority in the event that consideration of each produces a different outcome and, over the years, the Courts have shifted back and forth between placing greater reliance on textualism (looking at the plain text and the natural meaning of the words themselves) and contextualism (looking at the purpose of the document as a whole, the background circumstances and factors such as commercial common sense).

Lord Hodge stated in Wood v Capita that “textualism and contextualism are not conflicting paradigms”. The correct, objective interpretation of a clause or contract must be achieved having regard to both principles; the question of which deserves priority over the other will depend on the circumstances of the case, and the nature of the document.

For example, the Court may consider that the “textualism” approach should be the primary consideration in the case of a sophisticated document, negotiated and drafted by skilled professionals; if any provisions in the document create an unfair outcome for one party, it is likely that this was intended as a result of negotiations. However, if such a document is ambiguous in its meaning, the Court will then look to the overall context in an attempt to ascertain the true intention of the parties at the time the contract was made.

Conversely, if a document is informal, or clearly drafted without professional assistance, the Court may be more likely to depart from the most plausible linguistic meaning of the words used and favour a construction that better fits the commercial purpose of the contract, taking into account the document as a whole and the relevant circumstances. Nevertheless, the Court will not re-draft a contract to save a party from a “bad deal” where the original words used are clear and unambiguous.


Go to Court after a Little Help from Your Friends
Tuesday 11th July 2017

This summer marks 50 years since the release of The Beatles’ album Sgt. Pepper’s Lonely Hearts Club Band, and whilst one of the songs on the album talks about getting by with a little help from my friends, sometimes providing that help can end with a professional in court.

In the case of Lejonvarn v Burgess [2017] EWCA Civ 254 the parties were former neighbours who had become good friends.  The Burgesses wished to re-landscape their garden, Mrs. Lejonvarn was an American qualified architect so the Burgesses asked her to assist in the project, and she agreed to do so free of charge.  The project did not go well, costs escalated and the Burgesses claimed that Mrs. Lejonvarn was at fault.  They sued her for £265,000, claiming the cost of remedial works and the cost of completing the landscaping project.

In the Technology and Construction Court the High Court judge decided on the facts of the case that there was no contract between the parties (the judge could not identify offer and acceptance from the email correspondence) but decided that Mrs. Lejonvarn had assumed responsibility to the Burgesses for performing professional services and owed them a duty of care in tort, to exercise reasonable skill and care.

Mrs. Lejonvarn sought permission to appeal.

The Court of Appeal has recently handed down judgment, and upheld the decision at first instance.  The Court of Appeal Judge decided that even though there was no contract between the parties, the services were still provided in a professional context, and therefore to the extent that Mrs. Lejonvarn provided services she owed a duty to do so with reasonable skill and care.

The case is a reminder that a duty of care can arise in wide circumstances, even where you provide a little help to a friend.


GDPR - What does it mean for civil litigation?
Tuesday 4th July 2017

As Brexit negotiations begin to get underway, and the country takes stock of the announcements made during the Queen’s Speech on 21 June, one topic that is at the forefront of discussion in many businesses is data protection.

The EU’s General Data Protection Regulation (GDPR), set to come into force on 25 May 2018, spells big change for businesses globally and introduces a new framework of rules that has received a mixed reception.

Whilst many companies are already taking steps to ensure that the ways in which they handle personal data will comply with the GDPR in time, there has been some uncertainty as to whether or not this is actually necessary in light of the outcome of last year’s Brexit referendum. The announcement of a new Data Protection Bill during the Queen’s Speech has provided some clarity in this respect, as the government’s ‘associated background briefing’ to the speech stated, in no uncertain terms, that the GDPR will indeed be implemented into national legislation.

This announcement does not, in fact, change the position of the UK in relation to the GDPR coming into effect. The UK will still be a member of the EU on 25 May 2018, which means that, in any event, we will be bound by the provisions of the GDPR on that date. However, we can now be certain that the rules imposed by the GDPR will, for the most part, remain in place once we leave the EU, as the government’s intention is to harmonise national legislation with the GDPR.

With less than a year to go, the realisation is now dawning on many organisations which deal with personal data that they may have to radically transform their processes, and entirely re-think their attitudes towards privacy, if they are to comply with the GDPR by next May. The challenges facing those businesses over the next 11 months are clear - but what impact will the new regulations have on the world of civil litigation?

Increased claims by individuals for data privacy breaches

The GDPR introduces new rights for individuals and tougher penalties for businesses when it comes to breaches of data privacy. Many expect that, at the end of May 2018, there will be a flood of requests to companies’ data controllers for rights of access or portability of data, or to exercise the right to be forgotten. Such requests will inevitably result in a large number of complaints to the Information Commissioner’s Office, and, in turn, a number of those complaints may ultimately end up before the courts.

Further, there is speculation surrounding the potential for large-scale ‘class action’ style claims where data security breaches affect a large number of individuals. There are mechanisms already in place for such actions; the courts can make Group Litigation Orders, allowing claims arising from common issues to be managed collectively. It is also possible that a collective action regime (similar to that which was recently adopted for competition law breaches) may be rolled out or extended to cover data protection, whereby all affected individuals are automatically part of the ‘class’ of people bringing the action unless they choose to opt out.

The GDPR represents a tipping of the balance of data protection law, favouring the protection of the individual over the commercial needs of businesses. However, it should be noted that, even in the absence of the GDPR, data protection in the UK seems to be heading in that direction. Recent years have seen a rise in the number of claims for data privacy breaches, as well as an increase in the compensation payable for such claims, and individuals may now claim compensation for damage caused purely by distress (without any financial loss) following the Court of Appeal’s decision in Google v Vidal-Hall [2015] EWCA Civ 311.

Detailed exploration of the legal grounds for processing data

Under the GDPR, the consent of a data subject subsists as a legal ground for the processing of personal data, but it will be much more difficult to show that consent has been obtained than under the existing law (based on the Data Protection Act 1998). It is therefore likely that the other lawful grounds for processing data, such as necessity for the performance of a contract or the compliance with a legal obligation, will need to be considered in more detail than ever before, as parties to litigation will not be able to rely on consent as readily as they have done in the past.

There are also concerns that the tightened regulations on processing personal data may impact on the process of disclosure in litigation. Litigating parties (and their lawyers) may need to consider whether consent is required (and correctly obtained) when undertaking disclosure during proceedings if the relevant documents in the case contain personal data. If a party to litigation is based outside the jurisdiction, it will also be necessary to consider the lawful grounds for the cross-border transfer of personal data.

There has been some discussion around Article 48 of the GDPR and its impact on disclosure. Article 48 provides that any judgment of the courts of a non-EU country, requiring a data controller to transfer or disclose personal data relating to EU data subjects, shall not be recognised or enforceable unless it is based upon an international agreement between the requesting state and the EU. In the absence of such agreements, parties may refuse to provide disclosure on the basis that doing so would conflict with their general obligations under the GDPR. It remains to be seen what scope there might be for parties to use this to their tactical advantage, by feigning caution over data privacy to delay or prevent the disclosure of certain information.


The GDPR makes substantial changes to an area of law that affects a vast number of companies and individuals. As with any such reform, the big word on the tip of everyone’s tongue is “uncertainty”; until the new regulations come into force, and we begin to see the courts delve down into the details of the GDPR’s provisions, we cannot know for certain exactly how those provisions will be interpreted or what the practical implications might be.

What we can say for certain, however, is that the notion of data privacy is becoming more and more pervasive. Few businesses will escape the onerous requirements of the GDPR and other developments in data protection law. From a lawyer’s perspective, the impact is two-fold; not only will law firms have to ensure that their own processes are compliant with the new rules, but data privacy is also likely to become a primary consideration for lawyers in all practice areas – a far cry from what was once considered to be a niche area in commercial law.


Increase in Financial Services Court Claims
Friday 23rd June 2017

The latest published statistics show a 14% increase in the number of disputes at the High Court involving FTSE100 banks, but a reduction in the number of defamation claims at Court.

The research of Thomson Reuters records that 179 cases involving FTSE100banks were in the High Court in the year 2015/2016, more than double the number from 2013/2014.  Many cases will involve the fall-out from the mis-selling of derivatives and interest rate hedging products (IRHP).  The Financial Conduct Authority (FCA) has reported that the banks have completed their reviews of IRHP claims and are now dealing with consequential loss parts of the claims.  Claimants not eligible for the review, or who have rejected the outcome of the review, have been able to pursue their claims through the Courts provided that they are within the time-limits to do so or have agreed a ‘standstill’ agreement with the bank.

Claims have also resulted from the manipulation of Libor rates during the financial crisis.

Today it has been reported that Barclays bank and four of its former executives have been charged with fraud over alleged actions during the financial crisis.  Barclays has said that it is considering its position and awaiting further details.

The other headline to come out of the statistics is the fall in defamation claims being brought at Court, to the lowest number since 2008/2009.  The ‘serious harm’ requirement at section 1 of the Defamation Act 2013 is likely to have put off a lot of potential claimants, as well as the increases in Court fees, with the availability of alternative means of dispute resolution (ADR) often proving an attractive alternative for potential claimants compared with pursuing their defamation claim at Court.


General Mecical Council v Ankur Chopra [2017] - The application of the correct legal tests when considering Interim Order
Tuesday 30th May 2017

In this recent case, the General Medical Council (GMC) made an application to the Court for an extension of an interim order imposed upon Dr AC to suspend his practise for 12 months. The interim order, which placed restrictions upon Dr AC’s practise, in place at the time was due to expire on 22 March 2017.

New allegations had been raised against Dr AC which were strenuously denied. This prompted the matter to be put before the Tribunal. The GMC were requesting that the Tribunal vary the interim order from conditions to that of suspension. The GMC submitted that the new information indicated on-going concerns about Dr AC’s practise and that a reasonable and properly informed member of the public would be concerned as to Dr AC’s actions.

The Tribunal decided to grant the application for a suspension order on the basis that they did not think conditions would properly address the wider probity issues.

The Tribunal’s decision in favour of varying the order to one of interim suspension was expressed very briefly within their decision. So briefly in fact that Dr AC submitted that at no stage had the Tribunal sought to consider the balancing exercise incumbent with its power under s41A(7) Medical Act 1983 (the power to extend an interim order by a further 12 months) with reference to all of the relevant factors and the related submissions.

The High Court was conscious of this being a case where the Tribunal had failed to communicate the balancing exercise that it must appear to have carried out and that it had not mentioned the limbs of the legal test as it should have done. The Tribunal should have asked itself what members of the public would think if the allegations were proven, but were told that Dr AC had been able to practise unrestricted prior. It should then have balanced this answer against what would happen if there were suspended yet the allegations were unfounded. There was no indication of this being considered by the Tribunal or that it had considered the impact on AC and his patients. The court held that the Tribunal had not considered all relevant factors, resulting in a disproportionate interim suspension order.

The case highlights the requirement for Tribunals to properly consider all relevant factors when looking at interim orders, but also the need to carefully articulate their decision making within the records. The Court confirmed that suspension should only be ordered on an interim basis where there is a risk to the public which cannot be managed by way of conditions. 


Civil Restraint Orders to stop vexatious claims
Friday 19th May 2017

Often, corporate entities can be seen as a target for spurious and ill-founded claims for modest sums by unscrupulous Claimants. Where that happens it is possible to apply to the Court for an order that no further claims can be issued unless the Court’s permission is obtained.  These types of orders are known as Civil Restraint Orders.

We have recently acted for an international bank in obtaining a Civil Restraint Order against a vexatious litigant who has issued several baseless claims.  That order restricts that Claimant’s ability to issue further claims without the permission of the Court.

The High Court has recently considered the terms of extended civil restraint orders in the case of Ashcroft and another v Webster [2017] EWHC 887 (Ch).

In this case the High Court heard an application to further extend an existing extended civil restraint order for a further period of 2 years.  The relevant test on an application of that type is whether the Court considers it ‘appropriate’ to do so.  The Court should not be tempted to go back to the beginning of the relevant factual background and decide whether to impose another extended civil restraint order.

In making its decision the Court should have regard to why the existing extended civil restraint order had been made and the respondent’s conduct since then should be ‘seen through the prism of the earlier conduct’. 

On the facts of this particular case the High Court considered that there was a serious risk of further claims being issued if the existing extended civil restraint was not extended and granted the application.


New pre-action rules for debt claims
Monday 15th May 2017

A new Pre-Action Protocol for Debt Claims (“the Protocol”) will come into force on 1 October 2017. The Protocol, of which a final draft was published at the end of March 2017, contains provisions relating to the steps the court will expect business creditors to take before issuing proceedings against individuals for the recovery of debts.


Debt claims constitute a large proportion of UK court proceedings, and many such claims result in default judgment when debtors fail to file any defence to the proceedings.


The Protocol states that its purposes are to encourage communication between parties, to enable resolution without court proceedings, to encourage parties to act in a reasonable and proportionate manner, and to support the efficient management of proceedings where such proceedings cannot be avoided.


In practice, however, the Protocol may simply act as a safety net or buffer for debtors who are either struggling, or unwilling, to pay their debts.


The Protocol places a significant burden on creditors to provide extensive information to debtors (even in the simplest of cases), and to allow debtors increased time to respond to pre-action correspondence. Whilst compliance with the pre-action protocols is not mandatory, the courts are entitled (and indeed likely) to impose sanctions on parties that fail to comply with such provisions without good reason.


The additional time granted to debtors under the Protocol may be considered by some to be akin to an obligatory extended credit period.


The Protocol will apply to all businesses (including sole traders and public bodies) seeking to claim payment of debts from an individual (also including a sole trader). Therefore, with the exception of sole trader debtors, the Protocol will not apply to business-to-business debts.


The Protocol provides for a comprehensive Letter of Claim which should include, among other things, full details of the contract, debt, interest and any ongoing or proposed offers or payment plans. There are also a number of standard form enclosures to be attached to the Letter of Claim, such as a Reply Form and financial statements, which provide debtors with information to help them respond accordingly. The level of detail required in this initial correspondence is similar to that which the Court would expect upon the issue of a claim.


Under the Protocol, a creditor should allow at least 30 days for the debtor to reply to the Letter of Claim before commencing court proceedings. If the debtor does respond, the creditor should not commence proceedings until 30 days after receipt of the Reply Form.


A debtor, upon receipt of a letter of claim, may also request the disclosure of documents or information by the creditor. If such a request is made, the creditor should provide the documents or information (or an explanation as to why they are not being provided) within 30 days, and should not commence proceedings until 30 days after they have provided their response.


Further, if a debtor responds to the letter of claim, but no agreement is reached between the parties, the creditor should wait another 14 days before commencing proceedings.


On the one hand, these provisions could go a long way towards protecting individual consumers from rigorous debt collection by large companies. The Protocol will ensure that debtors are provided with all of the information they need about the relevant processes, and that they are given enough time to consider that information and make an informed decision about their next steps.


On the other hand, however, from October it will easily be possible for a debtor to delay payment by several months, simply by responding to correspondence at the latest possible date and requesting documents or information from the creditor. In the case of a simple contractual debt where there is no real justification for non-payment, this could prove harmful to some creditors – particularly small and start-up businesses, for which predictable cash flow may be vital.


It remains to be seen how well the Protocol will be received when it comes into force in October, and what impact it will have on small businesses. If you have concerns about the new provisions, or how they may affect your business, our commercial litigation team can advise you on dealing with debtors and guide you through the process.


General Election 2017 – Defamation, Campaign Spending Limits, and Purdah
Wednesday 10th May 2017

As campaigning heats up for the 8 June 2017 snap General Election, candidates and others on the campaign trail would be wise to remind themselves of the law regarding making false statements, so as to avoid a civil and criminal claim.

Statements made during Parliamentary debates cannot be the subject of a defamation claim because statements made in the course of, or for the purposes of, or incidental to, any parliamentary debate or proceedings are protected by ‘absolute privilege’.  In the particular circumstances of a 2014 case this protection was extended to statements originally made during a House of Commons committee but repeated outside of the Committee.

However this protection does not otherwise apply to statements made outside of Parliament, where the usual laws of defamation apply.  A person defamed by false statements made during an election campaign can therefore pursue a civil claim for defamation.

However, such false statements may also constitute a criminal offence under section 106 of the Representation of the People Act 1983.  Section 106 provides that:-

"(1) A person who, or any director of any body or association corporate which –

(a) before or during an election,

(b) for the purpose of affecting the return of any candidate at the election,

makes or publishes any false statement of fact in relation to the candidate’s personal character  or conduct shall be guilty or an illegal practice, unless he can show that he had reasonable  grounds for believing, and did believe, the statement to be true”.

The potential sanction for breaching section 106 is an injunction restraining repetition of the false statement, or of a false statement of a similar character in relation to the candidate, and a fine of up to £5,000.

A defence to a section 106 claim is that the person making the statement believed that it was true and had reasonable grounds for that belief.

Those campaigning for candidates should remember that section 106 applies to anyone making such a false statement, and not only to candidates making statements about an opponent.  They should also note that the campaign period commenced, not when the Prime Minister announced the General Election on 18 April 2017, but on 9th June 2016, as confirmed by the Electoral Commission.  Therefore, over the period 9 June 2016 to 8 June 2017, any individual or business engaging in campaigning activities in England must not spend more than £20,000 without first registering with the Electoral Commission as a campaigner.  The limit is £10,000 in Scotland, Wales or Northern Ireland.

Finally, the Government has announced that the ‘purdah’ period took effect on 21 April 2017.  This means that government activity is now restricted to essential non-policy related activity until after polling day.


Google - v - Uber: The battle for dominance of the automatous vehicle market
Tuesday 9th May 2017

A dispute has broken out between two of the most well-known tech companies in the world, Google and Uber, in relation to the development of automatous vehicles.

Waymo, which is now a subsidiary of Google Inc, has filed a claim in the United States of America asserting that Anthony Levandowski, a former Google engineer on the Waymo project (the name given the Google’s self-driving car development) and current vice president at Uber, stole up to 14,000 confidential documents (9.7 gigabytes of data) before leaving Google.

Waymo has claimed that Uber has stolen trade secrets and is infringing on its patents in connection with their development of autonomous vehicles.

Waymo originally asserted that Mr Levandowski used the data to entice Uber into buying his self-driving truck start-up, Otto, for $680,000,000 in August 2016 (only a matter of months after it launched). Waymo recently expanded upon this argument suggesting that Otto was actually a shell company used to facilitate Uber’s alleged infringement upon Waymo’s rights.

Waymo point out that the purchase of Otto by Uber was negotiated whilst Levandowski was still employed at Google. The company’s lawyers have produced documents that they say show that Levandowski was promised 5 million shares in Uber (amounting to roughly $250 million in stock) as early as January 2016.

Waymo have also requested that the Court order an injunction to prevent Uber using any of the data which it is alleged to have stolen, effectively a request that Uber ceases its automatous vehicle programme.

For the time being, Uber are asserting that, as the matter centres on Mr Levandowski’s actions, the claim should be subject to an arbitration agreement as per his employment contract and so, if the Court accepts such an argument, a trial may never take place.

The Court has not yet made any order but a ruling is expected in the coming days or weeks.

As the battle for dominance of the automatous vehicle market intensifies in Silicon Valley, and as the popularity of such technology increases elsewhere, it is likely that more and more tech companies will seek to recruit individuals well versed in automatous technology. If those companies adopt similar techniques to those allegedly used by Uber, we can expect to see an increase in the number of similar claims brought - including injunction proceedings.

In the UK, if it can be shown that a former employee is in breach of a restriction in his or her contract of employment, then it is possible to bring a claim seeking an injunction to prevent further infringement.  The former employer can seek such an injunction against the individual and against competitor businesses, but they must act quickly.

Please contact us for legal assistance in the event that you have any concerns that a former employee and/or competitor business may be infringing on your businesses rights.