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Dispute Resolution

Could Russell Brand sue the Sun over ‘hypocrite’ allegation?
Wednesday 3rd December 2014

The comedian and actor Russell Brand has today threatened to take legal action over an article published on the front page of the Sun which alleged that he was a “hypocrite” because of his housing arrangements.  In this short article, we take a look at whether in principle calling somebody a “hypocrite” could give rise to a claim.

In basic terms, the law of defamation is all about deterring and remedying unwarranted damage to reputation. Words are defamatory when they cause serious harm to reputation.  What amounts to serious harm will fall to be decided on a case-by-case basis and what is said must serve to undermine reputation in the eyes of right-thinking members of society generally.

So, is alleging that someone is a “hypocrite” defamatory?  The courts have held in previous cases that it is defamatory to publish an allegation that a person is a hypocrite but each case is decided on its own facts and Mr Brand must satisfy the court that the allegation has caused serious harm to his reputation.  If the Sun were to resist any claim brought against it by Mr Brand, it would need to demonstrate that either the allegation is not defamatory or that it can rely on a defence such as that of truth (that the statement is substantially true), honest opinion (that the statement is an opinion, based on true facts, which an honest person could hold), or that it was a publication on a matter of public interest.

On the other hand, if the Sun were to decide to issue an apology, Mr Brand would need to carefully mitigate his loss and ensure that any refusal to accept an apology was reasonable. Indeed, in the case of Mawdsley –v- Guardian Newspapers Ltd in 2002, human rights activist, James Mawdsley, brought an action over an article which was published in the Guardian which alleged that he was a hypocrite who cared little for the effects of his activities.  In that case, the newspaper accepted a defamation and negotiated with Mr Mawdsley over the terms of an apology; however, no agreement could be reached and the issue went to court.  In that case, the court found that Mr Mawdsley had failed to mitigate his loss by his unreasonable rejection of the apologies that had been offered and by his refusal to allow the publication of an apology.

The existing case law should therefore serve as a warning to both the Sun and Mr Brand.  Although any claim brought by Mr Brand will fall to be decided on its own facts, an allegation that someone is a “hypocrite” has already been considered capable of being defamatory in other cases; however, if an apology were to be offered, Mr Brand would need to take care that he did not unreasonably reject it.    

It remains to be seen whether Mr Brand will indeed bring a claim against the Sun regarding its allegation that he is a “hypocrite” but in a tweet directed at the accounts of the Sun and Rupert Murdoch, he wrote: “Hey … I’m gonna sue you and give the money to NewEraEstate and JFT96”.


Black Friday: getting more than you bargained for
Monday 1st December 2014

Whilst UK retailers continue the recent trend of adopting their American counterparts’ post-Thanksgiving price-slashing, the fourth Friday of November - now seemingly better known as ‘Black Friday’ - should also serve as a warning to stores not already diligent to the point of paranoia about the execution of their health and safety policies.

Whether the synchronicity of Friday’s discounting is an exercise in retail altruism or, more likely, the continuation of the Christmas period’s perpetual encroachment into November, it is clear that consumers are happy to cram themselves into shops to grab as many bargains as they can. However, with such an influx of eager customers, seemingly on the verge of riot, the potential for accidents, injuries and consequently, occupiers’ liability claims are plain to see. Whilst panic-struck shop workers may well have their hands full in seeking to broker calm between rowing shoppers, it is imperative that the ‘basics’ of ensuring premises are as safe for customers as they are enticing should not be forgotten by management. Failing to ensure the safety of stores (not to mention a safe system of work) could well be a particularly risky (and self-induced) potential banana skin for retailers after the dust has settled and the ‘normal’ Christmas shopping fervour has resumed. 


Dumping graciously: how to get out of commercial relationships
Thursday 27th November 2014

The recent unceremonious dumping of a woman by text citing several bizarre reasons for doing so has gone viral.  If only it was always this easy, however, to get out of commercial relationships.

There is, of course, a benefit to entering into a long-term contract with another party for the supply of goods and services – it provides valuable certainty and a guaranteed relationship for the period of time stated.  But such a commitment carries a risk and, without the inclusion of express terms within a contract allowing you to terminate it earlier than the agreed term, you will be tied in for the duration.

On occasions, common law steps in to grant termination rights (notwithstanding the failure to include express rights) but fault is required and such fault is likely to be greater than not liking someone’s cat (as in the case above)!  The other party must have committed a “repudiatory” (or fundamental) breach of one or other of the terms of the contract and it will be a matter of fact and degree whether a “repdiatory” breach has occurred.  Alternatively, where a contract doesn’t contain an express provision bringing it to an end, it may be possible to terminate it on reasonable notice.  What amounts to “reasonable” will depend on the facts of the case.

It is always worth, therefore, giving thought, prior to entering into a long-term contractual relationship, whether there are any particular circumstances within which you would wish to be able to end it prematurely.  This can include termination where a breach of contract occurs, but can include a number of other scenarios and there is no need for any specified breach to amount to a right to terminate at common law.  It will still always be a question of fact, and potentially interpretation, whether a specific circumstance said to give rise to termination actually exists.  The Court has also challenged contractual provisions entitling a party to terminate contracts in the event of “any” breach.  But a well-drafted contract can reap dividends in providing a pre-meditated “get out” in specified circumstances and reduce the need to rely on common law.  This, in turn, should help reduce the risk of disputes.


Default-y Towers - Thinking of reviewing your experiences online? Read on…
Wednesday 19th November 2014

A Blackpool hotelier who levied a £100 charge to customers who left a “bad review” on the website Trip Advisor is now under investigation by Trading Standards.

The hotel allege that a clause in their terms and conditions, which are presented to customers along with booking documents, permits them to charge a maximum of £100 per review.

The controversial clause, and its repercussions, raise a host of legal issues. Whilst the customers have sought to refer the matter to Trading Standards, they could theoretically have remedies before the Court, if they were so minded to fight the charge. The onerous clause is potentially vulnerable to challenge pursuant to the provisions of the Unfair Contract Terms in Consumer Contracts Regulations 1999.

The advent of the review websites such as Trip Advisor have created a friction between hoteliers and customers wishing to “vent their spleen”. Business owners wishing to bring legal proceedings for libel against the authors of scathing (and allegedly inaccurate) reviews face the hurdle of uncovering the identity of often anonymous reviewers. However, given the potentially devastating repercussions of the reviews for some owners, this may be a price which they are willing to pay in order to vindicate themselves.

For their part, the disgruntled customers intend to fight the charge and allege that it is an infringement of their right to freedom of speech. 

This unfortunate case highlights the importance of awareness about the enforceability of your own, or another party’s, terms.


Non-party pooper!
Thursday 16th October 2014

In the recently heard case of Weatherford Global Products Limited v Hydropath Holdings Limited and others [2014] EWHC 3243 (TCC) the Court considered, and gave guidance on an application for a costs order against a non-party.

Existing authorities have shown the Court’s preference for non-parties to be warned at the earliest opportunity if it was anticipated that there would be an application for costs to be made against them. In this instance, the applicant did not warn the non-party in advance of their intention. However, the Judge ruled that in all of the circumstances, it was appropriate to make the costs order, notwithstanding the lack of warning given to the non-party. In coming to this decision, the Judge was persuaded by the following factors:

  1. The non-party was a major shareholder of the Defendant company and another company which was also a party to the litigation.
  2. The non-party has effectively controlled the litigation. He funded at least half of the litigation personally and in the event that it was successful he stood to gain personally.
  3. The Defendant had pursued “unreasonable” and “speculative” counterclaims, which was a decision made by the non-party.

This ruling is indicative of a shift from the traditional view adopted since the power of the Court to make a costs order against a non-party was recognised in the case of Aiden Shipping v Interbulk Limited (The Vimeira) (No2) [1986] AC 965. At its introduction, Courts used the remedy sparingly but in recent years the state of the law has evolved to accommodate a greater willingness on the part of the Court to make a non-party costs order where it can be demonstrated that the circumstances of the case are warranting of it. The ruling should serve as an important warning to those who are not themselves a party to litigation but who are controlling or supporting a party. 


Charging Orders and recovering Judgment debts
Tuesday 7th October 2014

Businesses concerned that they will not be able to recover Judgments from cash-poor defendants should take comfort from the recent decision in Fred Perry (Holdings) Limited v Genis which provides confidence in the Court’s willingness to enforce Charging Orders obtained as security for Judgment debts.

Fred Perry had obtained Judgment against Genis for a sum of around £130,000 in relation to the sale of counterfeit goods.  A Charging Order securing the amount of the Judgment was subsequently obtained over Genis’ matrimonial home as security for the Judgment debt.

Genis’ home was reported to be worth in the region of £1.2 million and, following repayment of the mortgage, there was considered to be more than sufficient funds to discharge the Judgment debt.  Fred Perry sought an order for sale of the property from the Court.

Genis shared his home with his wife and two children, aged 14 and 9.  The children attended local specialist schools and, in the event of a sale, it was said that the children may have need to change schools.

Notwithstanding the above, the Court ordered a sale of the matrimonial home.  In deciding whether or not to grant the order, the Court considered a number of factors.  The Court considered the purpose for which the property was bought in the first place and the welfare of Genis’ children and wife.  However, it also had to take into account the interest of Fred Perry, a substantial creditor, and, ultimately, decided that commercial interests should generally take priority over family interests.  As the only realistic source of payment for the Judgment a sale was allowed but, in recognition of the effect on the family, the sale was postponed for 12 months.


“Youview,” “Your View” and the Court’s View
Monday 22nd September 2014

Youview has become a household name over the past couple of years, as a result of an increasing call from consumers for “on demand,” catch up television. It may, however, not be a household name for much longer, as a recent case has held their name to be an infringement of the, not so well known, Your View service - an online billing platform set up by Total Limited for their bespoke telecommunications customers. This decision may, therefore, ultimately lead to Youview having to undergo a rather expensive rebrand.

In 2010, when Youview sought to register the now well-known, stylised word of “Youview,” Total objected, on the basis that the mark was too similar to their already-protected mark, which had been registered in 2009, under the same services for which Youview now sought registration. The Intellectual Property Office accepted Total’s objection and Youview failed to register their mark. Regardless of this, Youview carried on and their “TV box” continued to be marketed. Surprise, surprise, Total Limited brought trade mark infringement proceedings.

At trial, it was noted that Total had obtained trade marks for Your View under the following categories:

  • Class 9 - Database programs and databases;
  • Class 35 Provision of commercial business information by means of computer database, computerised database management and compilation of information into a database; and
  • Class 38 - Providing access to computer databases; telecommunications services.

At first glance, aside from the obvious similarities with name, the two products do not appear to be all that similar in nature. On the one hand, Youview provides an internet television service; whereas, on the other, Total Limited’s Your View is an online account management facility. The Court, however, rejected Youview’s line of argument in this regard and found that Youview’s TV box involved the provision of a database, database programmes and telecommunications services, as per the Your View trade mark.

The Court then turned to consider the question of whether there was a likelihood for confusion between the two. A key factor here for the Court appeared to be the coming together of what have historically been two entirely separate markets – television and telecommunications. Given that the major shareholders in Youview are big telecommunications companies such as BT and Talk Talk, and given that such companies often provide the Youview box in addition to their telecommunications services, the Court was of the view that confusion was likely.

Without delving too far into the complexities of Intellectual Property Law, this case should alert companies to the risk of trade mark infringement in markets which may not appear, at first sight, to be of direct relevance and that infringement does not only involve blatant copying. It also highlights the necessity for companies to be alive to the need to protect their trade marks, as it is down to individual companies alone to protect their brands.

It is anticipated that Total Limited will seek an injunction to prevent the continuance of the Youview name; however, there is also the potential for an appeal from Youview. Whichever avenue is followed and regardless of whether Youview are required to undertake an extensive rebrand and marketing campaign, costs will rack up for both sides. As with all legal disputes, prevention is better than cure - companies should therefore ensure that the trade mark register is well-searched and that they have done their homework, before any new brands/products are invested in.


Simple steps to take before entering into a contract
Wednesday 17th September 2014

In my last post, I cautioned against adding too much unnecessary detail to contracts and highlighted that a ‘short and sweet’ approach to drafting was often best.

The recent case of Fujitsu Services Ltd v IBM United Kingdom Ltd [2014] EWHC 752 (TCC) involved what will no doubt have been a substantial contract (with subsequent amendments) in relation to provision of IT and related services to the Driver and Vehicle Licensing Agency.  The DVLA contracted with IBM to provide IT and related services, and IBM in turn sub-contracted with Fujitsu to provide some of the services.

Fujitsu claimed that IBM had not sub-contracted work in accordance with the sub-contract, as a result of which Fujitsu had lost a substantial amount of revenue.  Various matters were heard by the Court as preliminary issues, one of which was whether IBM could rely on exclusion and limitation clauses in the sub-contract.

The key exclusion clause that I want to consider here stated “neither party shall be liable to the other under this sub-contract for loss of profits, revenue, business, goodwill, indirect or consequential loss or damage...”.  Anyone familiar with commercial contracts will have come across similar clauses.

Fujitsu attempted to argue that the exclusion clause did not apply, in particular because the effect of it would be to exclude liability for breach by IBM of its obligations to allocate work to Fujitsu, and a central element of the parties’ bargain would be deprived of all contractual force, or turned into a mere ‘statement of intent’.

The Court did not accept Fujitsu’s argument.  The Court noted that the approach to take in considering the exclusion clause was to ascertain what a reasonable person would have understood the parties to have meant by the language used.

The Court found the language of the exclusion clause to be clear and that there was nothing in the context or surrounding clauses of the sub-contract that pointed to any different construction than a simple application of the words to the facts of the case – for example, neither party could be liable to the other for loss of profits.   The Court also noted that the exclusion clause was not one-sided and that IBM too was giving up potentially very significant claims.

Whilst ‘short and sweet’ is often best, there will be situations, like this one, where a detailed and substantial contract is required to set out a complicated commercial arrangement between sophisticated parties.  The result in Fujitsu Services Ltd v IBM United Kingdom Ltd reinforces the need to take simple steps before entering into contracts (whether they are ‘short and sweet’, or ‘War and Peace’):

  • Read it, carefully!
  • Consider it, carefully!
  • ‘Reality check’ it – carefully consider the ‘worst case scenario’ effect of each clause – for example, if X happens, what will the effect of clause Y be; or if we want A, does clause B allow us to get it?

This might seem very simplistic, but if these steps are taken before a contract is entered into, costly and time-consuming disputes might be avoided.


Over-egging the pudding
Friday 1st August 2014

It may come as a surprise to hear lawyers calling for less detailed, less bulky contracts but there are certainly situations where less is more.

In commercial litigation, contracts at the centre of disputes are often enormous.  A vast range of clauses means that, not only is it difficult to focus on the main issues, but the party bearing obligations to perform under the contract is faced with a wide variety of duties and obligations, many of which have nothing to do with the central purpose of the contract but which have been inserted by one over-zealous party (and allowed to remain by a compliant (or busy) opposite party).

Take a very basic example.  Mr Jones wants a hole to be dug in his garden (let's not dwell on why) and so contracts with a firm of builders, Bob & Sons, for them to carry out the work.  Mr Jones and Bob & Sons might want, for example, to specify in a written contract when Bob & Sons will start the work, how big the hole will be, how much the work will cost and, perhaps, specify some arrangements just in case something goes wrong, such as Bob & Sons not finishing the work on time.

However, it would not be surprising to find that the contract between Bob & Sons and Mr Jones ends up including a range of clauses that seem to be unnecessary.  Mr Jones might insist on including clauses dealing with what sorts of spades Bob & Sons will use, where Bob & Sons’ workers will eat their lunch and where Bob & Sons will park their vans.

There might be valid reasons for Mr Jones insisting on some of these clauses.  There might, for example, be issues between Mr Jones and his neighbours in relation to parking that Mr Jones is keen not to make worse and so he might want to specify where Bob & Sons park their vans.  However, the potential risk in this situation for Bob & Sons is that they will be signing up to obligations that they might breach (and be liable to Mr Jones for their breaches) which really have nothing to do with the central purpose of the work - digging a hole.

Adding too much unnecessary detail to the contract also has the potential to cause increased legal costs for Mr Jones and Bob & Sons and, in the event of a dispute, make it more difficult to focus on what the real issues between them are.

There is of a course a place for a very detailed, expansive contract.  However, there are many situations where short and sweet is best and a concise, focused contract can allow the parties to get on with doing what they want to do and avoiding disputes.


For better, for worse – do you know who you are getting into business with?
Friday 25th July 2014

Following the recently reported whirlwind marriage of Cheryl Cole and Jean-Bernard Fernandez-Versini, we ask do you know who are getting into business with?

It’s all too easy to get carried away in the throes of a new business relationship. You hope that you will be one of the lucky ones and have a relationship that lasts a lifetime (or at least runs its course without conflict). However, far too often such relationships turn sour. Whilst “divorce” may ultimately be inevitable, here are some tips to help minimise the possibility of a relationship breakdown and, where a relationship does breakdown irretrievably, some pointers to minimise the potential acrimony and financial fall out that arises:

  • Do your research. Check your future “partner’s” financial position. Ask around about them within the trade. Be wary of new companies, shell companies, and companies that have been involved in lots of disputes in particular.
  • Where there are potential financial issues but you still want to proceed, consider obtaining personal guarantees from directors and/or cross guarantees from associated companies.
  • Watch out for phonies. Ensure that you are dealing with the person you think you are, that is someone with the necessary authority to contract with you.
  • Make sure that the terms of your agreement are put in writing (as well as any later variations). This need not be in a formal contract but ensure that the agreed terms are fully recorded in writing in a common document.
  • Where you go to the trouble of recording an agreement in writing, read it properly and ensure that it reflects what has actually been agreed between you.
  • Where a contract is continuing (i.e. is not for a fixed term or one off supply), consider what the termination provisions should be, that is the length of notice to be provided to end the agreement and whether it is appropriate to have differing notice requirements in differing termination circumstances. Ensure that whatever you decide is both acceptable to you and realistic.  In relation to any notice served by your “partner”, ensure that it gives you sufficient time to “get out” with minimum disruption to your business.
  • Where a contract is for a fixed period of time or a long notice provision applies, think about what is to happen if and when the relationship breaks down. Where termination is as a result of one party’s wrongdoing, give thought to pre-calculating the losses payable in such circumstances (or at least a pre-agreed method to calculate them), and even exclusion provisions limiting either party’s liability. Do watch out, however, for penalty provisions which will not be upheld by the Courts, any pre-estimates of loss must be genuine.
  • If things go wrong during the relationship, don’t let matters fester, bring them to a head and/or seek professional advice. Also, consider the use of dispute resolution clauses within an agreement to set out precisely what should happen in the event that a dispute arises.
  • Finally, remember that if something is too good to be true it usually is!

The above sadly won’t stop disputes happening (and by no means comprises an exhaustive list of steps that can be taken at the start of a relationship to minimise the risks) but, by bearing them in mind, you should hopefully lay the foundations for a good shot at a long, prosperous and hassle free commercial relationship.