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Dispute Resolution

Court names and shames Dickensian style warring relatives
Monday 7th December 2015

As Charles Dickens commented about his fictional case of Jarndyce v Jarndyce it is not unusual for the costs of claims against deceased’s estates to spiral out of control and exhaust the estate.  This is particularly the case where there are warring relatives.

The Court of Protection has recently taken the unusual step of naming and shaming the parties in Aidiniantz v Aidiniantz and others [2015] EXCOP 65 as a warning and deterrent to anyone else conducting similar litigation.

The issue before the Court was where an 88 year old protected lady should live and what was in her best interests. Her 4 adult children had incurred legal costs of over £270,000 in the proceedings. 

Mr Justice Jackson commented that ‘happily, very few families descend to the level of mutual acrimony that exists in this family’ and he determined that the conduct of the parties in the proceedings meant that they should forfeit the right to be taken seriously about what they believed to be in their mother’s best interests.


Break Clauses in Commercial Leases: No Implied Term to Apportion Rent
Monday 7th December 2015

The Supreme Court has now handed down its eagerly-awaited decision in the case of Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited [2015].

The case concerned a break clause in a commercial lease. The Supreme Court was asked to consider whether the tenant, Marks and Spencer, was entitled to a refund of rent paid in advance where the break date in their lease did not coincide with the end of a quarter. The Supreme Court ruled unanimously that Marks and Spencer was not entitled to recover the over-paid rent.

In this case, the lease had been granted for a fixed term, and rent was payable in advance on the usual quarter days. Marks and Spencer validly exercised its right under the break clause to determine the lease on 24 January 2012, after it had paid the full quarter’s rent due on 25 December 2011. Marks and Spencer claimed that there should be an implied term written into the lease which would allow it to recover from the landlord the apportioned rent from the break date until the end of the quarter.

Accordingly, the Supreme Court was required to reconsider the law in respect of implied terms in contracts. The Court stated that a term will only be implied where it is strictly necessary for business efficacy, i.e only where, without the term, the contract would lack commercial or practical coherence. A term will not be implied if it ‘lies uneasily’ with the express terms in the contract.

The Supreme Court also confirmed that rent payable in advance is not apportionable under section 2 of the Apportionment Act 1870. Therefore, rent payable in advance can only ever be apportioned as a result of a clear and unambiguous clause to that effect in the contract. There is no doubt, however, that section 2 of the Apportionment Act applies to rent payable in arrears. 

The Supreme Court clarified that the same conclusion applied to the car park licence fee and the insurance rent paid by Marks and Spencer, but not to the service charge; in respect of the service charge, there was a specific provision in the lease which contemplated repayment.

But where a tenant has exercised its right under a break clause to determine the lease, and the break date does not coincide with the end of the quarter, can the tenant simply pay an apportioned final rental payment? Unfortunately, the Supreme Court did not answer this question, and such a scenario remains open to challenge in the future.  


Privilege in court proceedings
Thursday 3rd December 2015

The High Court has recently given an important judgment about the legal professional privilege status of documents in Court proceedings.

The case of Property Alliance Group Ltd v The Royal Bank of Scotland Plc [2015] was about a £30 million damages claim relating to LIBOR interest rate swaps from 2004 to 2008. The bank founded an Executive Steering Group (ESG) to oversee the investigations and related litigation, and their lawyers prepared summary reports before and after meetings. PAG demanded the disclosure of these reports and the bank argued that they were privileged.

A party to litigation can argue that certain documents are not disclosed in the court proceedings because they are privileged:

  1. Legal professional privilege

    This covers confidential communications between the lawyer and client for the purpose of seeking or giving legal advice.
  2. Litigation privilege

    This type of privilege is wider. It covers communications between the lawyer and client, between the lawyer and a third party, and also between the client and a third party. The important point is that the communication must be made after litigation has started or is in reasonable contemplation. Also, the communication must be for the sole or dominant purpose of litigation.

In the Property Alliance Group UK Limited case the judges held that there were three main reasons why the summary reports were privileged. Firstly, it was the lawyers who drafted the reports for their client for the purpose of the litigation. Secondly, the lawyers had clearly marked the documents “confidential and privileged”. Thirdly, all of the reports were drafted and communicated to their client either before or after the meeting.

This case shows how important it is when creating new documents during a dispute to consider whether or not they will have to be disclosed in the litigation. 


Ramsey v Ramsey - Son brings claim against mother's estate
Monday 30th November 2015

In Ramsay v Ramsay [2015] All ER (d) 32 the High Court has recently had to decide a claim brought by a son against his mother’s estate. The son was concerned that his mother could not read or write and also that her mental capacity may have been impaired when the will was executed. For that reason the son was concerned that his mother’s will was not valid.

The Court heard evidence that the mother was aware of the content and the effect of her will because this had been explained to her in clear terms by her solicitor before the will was executed.

Claims against estates can be costly and eat away at the value of the estate and come at a time when relatives of the deceased are grieving. This case is an important reminder for anyone making a will to ensure that they engage a reputable solicitor to be sure that their will is properly prepared and executed to minimise the risk that their personal representatives may have to deal court proceedings.  


Alternative Dispute Resolution (ADR) Boost for Consumers
Wednesday 25th November 2015

Two regulations have recently come into force which provide good news for consumers wishing to resolve a dispute by means of Alternative Dispute Resolution or “ADR”.

ADR is the term given to methods of resolving a dispute other than through Court proceedings.  There are several different forms of ADR, such as a simple negotiation between the parties, mediation (where an independent third party attempts to broker a settlement), arbitration (where the independent third party reaches a decision on the dispute), and forms of early neutral evaluation or determination of disputes.

Each form of ADR has its own strengths and weaknesses.  More and more parties to a dispute are turning to ADR rather than litigating their dispute through the Courts.  With the recent substantial increases in Court fees, ADR can often be quicker and cheaper than issuing Court proceedings, it enables the parties to keep the matter confidential, and it enables them to consider different commercial terms of settlement that can’t be ordered by a Judge at trial.

The government wants to encourage ADR and these regulations aim to provide easier access to ADR.  They implement the European Directive on Alternative Dispute Resolution (ADR) in the UK.

The two regulations are The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 and the Alternative Dispute Resolution for Consumer Dispute (Amendment) Regulations 2015.

The regulations come into force in stages.  They require businesses selling to consumers to provide information about ADR, they establish competent authorities to certify ADR schemes, and they set standards for applicants who wish to provide ADR schemes.

The regulations do not make it mandatory for traders to participate in ADR schemes.  However they do require businesses, who sell directly to consumers, to point consumers in the direction of a certified ADR scheme where they cannot resolve the dispute by following their own internal processes.


Defamation Update
Wednesday 25th November 2015

Recent statistics show an increase in the number of defamation claims related to social media such as Facebook and Twitter, but an overall decrease in the number of libel claims issued at Court.

The research, released by Thomson Reuters earlier this month, shows that the total number of reported defamation claims in the UK in the year to 30th June 2015, was 63.  This is down from 86 compared to the previous year, a reduction of 27%.  Indeed the number of reported defamation claims is now at its lowest number since 2008/2009.

Bucking the trend was the number of reported defamation claims relating to social media.  In the year to 30th June 2015 these increased to 11, from 8 the previous year.

There are likely to be a numbered of factors behind the statistics.  Individuals are far more likely to be subject of defamatory comments now in social media than in traditional forms of print media.  Given the way that social media postings can be shared quickly and repeatedly, the damage caused as a result of defamation on social media can be substantial.

The requirement to show damage in the form of “serious harm” is likely to be behind the overall decrease in defamation claims issued at Court.  The Defamation Act 2013 came into force on 1st January 2014 and introduced in section 1 a new requirement that Claimants must prove that publication of the statement “has caused or is likely to cause serious harm to the reputation of the claimant”.  Businesses are required to prove “serious financial loss”.

The new serious harm requirement was designed to discourage trivial claims and it appears from the statistics that it is making Claimants, and in particular business Claimants, reluctant to pursue their claims at Court, or at least to take steps at the outset of their case to prepare substantive evidence to show the harm suffered and overcome this hurdle.  Recent cases provide helpful guidance to Claimants on practical points to take at the outset to best prepare their claim.

The statistics relate to defamation claims at Court and Claimants should note that issuing Court proceedings isn’t their only option to seek redress.  There are several forms of Alternative Dispute Resolution (ADR) that are often effective options for Claimants to resolve a defamation claim more quickly and at less cost than through the Courts.


Founder of Victoria’s Secret Brings Ferrari Contract Claim
Thursday 19th November 2015

A High Court Judge has recently given judgment on a preliminary issue hearing to determine ownership of a rare Ferrari.

The 1954 Ferrari 375 Plus was one of only six of its type ever made.  The US Founder of Victoria’s Secret, Les Wexner, bought the car last year for £10.9 million at an auction held at Goodwood Festival of Speed.  It was the most expensive road-legal car in England.

The Ferrari was built in 1954 but later suffered a wiring fault and caught fire.  The burnt out wreck was purchased by Karl Kleve in Ohio but was stolen from him sometime in the late 1980s.  The former Belgian racing driver Jacques Swaters purchased the chassis in 1990 and began restoring the vehicle.  Once fully restored it was displayed at Ferrari’s Maranello museum in Italy where it came to the knowledge of Mr. Kleve, who claimed ownership.

At an auction last year held by Bonhams the Ferrari was purchased by Mr. Wexner.

However, Mr. Kleve’s daughter then claimed that she was the true owner of the vehicle, following the death of her father.  Mr. Wexner said that he was never told by the auction house that ownership of the car was in dispute and he commenced legal proceedings against Bonhams for misrepresentation.

The Judge decided to determine the question of ownership of the car at a preliminary Court hearing which was held in October.  Mr. Justice Flaux gave judgment on 10th November 2015 and determined that Mr. Swaters had bought the chassis in good faith and was unaware that it was stolen from Mr. Kleve, and therefore that he had good title to it.  Ownership had passed to Mr. Swater’s daughter and the Judge decided that at the time of the auction she was the legal owner so the car could be validly sold to Mr. Wexner.

In claims of property ownership a party can defend a claim of ownership by establishing that they purchased the property for value (i.e. consideration given in money or money’s worth), in good faith and without notice of an existing interest in the property.  The onus of proving such a position as a bona fide purchaser is on the person claiming it.

Now that this issue has been determined Mr. Wexner can pursue his claim against the auction house, he seeks a full refund and damages.


Terrifying Trespassers: Couple Sues Creators of ‘The Conjuring’
Wednesday 18th November 2015

A Rhode Island couple is suing Warner Bros., the makers of the 2013 horror film The Conjuring, over trespassing fans.

The hit film, which centres on the story of real-life paranormal investigators Lorraine and Ed Warren, has apparently sent horror fans flocking to a Rhode Island farmhouse in search of ghosts and ghouls.

The house in question, now owned by married couple Norma Sutcliffe and Gerald Helfrich, was the subject of a real-life paranormal investigation by the Warrens in the 1970s. Whilst Warner Bros. didn’t actually film on location at the house itself, the home’s likeness was recreated in the movie, and the real names of the previous owners of the house were used, enabling fans to track down the supposedly haunted address.

According to court documents cited in the American press, Sutcliffe and Helfrich claim that they have been subjected to “threats of physical violence and harm, sleepless nights, and worry that, one day, one of the many trespassers will commit an act of destruction, violence, or harm”.

The couple’s lawsuit has been brought against Warner Bros., the film’s director James Wan, five individual trespassers and up to 500 unnamed intruders. Sutcliffe and Helfrich allege that Warner Bros. “chose to market the movie as based on a true story and identified and published prominently the Harrisville, Rhode Island location of the house” without informing the owners.

Under English law, a claim for trespass may be brought in respect of a person's unlawful presence on the land of another, regardless of whether the presence causes any actual damage or not. Clearly, such a claim could not be brought against Warner Bros. as they have not set foot on the land; although, such a claim could be brought against the trespassers themselves.

Under English law, the most conceivable claim for the homeowners to bring against Warner Bros. would be a claim in negligence.  Negligence covers circumstances in which one party owes another a duty of care and fails to exercise that care which the circumstances demand. The leading case in this area is Donoghue v Stevenson (1932), in which the House of Lords found that a drinks manufacturer owed a duty of care to a lady who found a slug in her bottle of ginger beer, despite there being no contract in place between the two parties. The Rhode Island couple could, theoretically, argue that Warner Bros. owed them a duty not to disclose the address or identifying features of the property.

Warner Bros. have not commented on the claim. Let’s hope somebody warned Sutcliffe and Helfrich that they’re bringing out a sequel. 


An Ironic Injunction: Boy Arrested over TalkTalk Hack Sues for Breach of Privacy
Monday 9th November 2015

According to various newspaper reports, a schoolboy arrested in relation to the cyber-attack on the telecommunications company, TalkTalk, is suing three national newspapers, Google and Twitter for alleged breach of privacy.

Specifically, it is reported that the boy is claiming breach of data protection legislation, misuse of private information, defamation, negligence and breach of confidence.

The attack on TalkTalk’s website was the third such hack in 12 months. A statement released by the phone and internet provider indicated that customers’ names, addresses, bank details and other information may have been accessed by the hackers. 

TalkTalk is not the only major company to suffer a data security breach recently. In July, the membership database of Ashley Madison (a website that facilitates extra-marital affairs) was hacked, with members’ personal details being stolen and published online.

In this case, the 15 year-old alleges that his own privacy was compromised by articles in the Daily Telegraph, Daily Mail and the Sun, which centred on his arrest in connection with the cyber-attack.

On Friday, a Judge in the High Court in Belfast granted injunctions against Google and Twitter, ordering that any online references to the teenager’s name, address, images or information about his physical appearance be removed. The three newspapers have also given undertakings aimed to protect the identity of the boy, pending the outcome of the case (which is due to be heard in December).

In the UK, the collection and use of personal data is primarily governed by the Data Protection Act 1998 (DPA).  The obtaining or disclosure of personal data without the necessary consent is a criminal offence. A statement released by TalkTalk last month confirmed that a criminal investigation into the cyber-attackers has been launched.

However, the DPA also imposes obligations on the organisations that process personal data to take measures to protect that data against loss, theft and malicious hacking or viruses. Therefore, TalkTalk could itself, in theory, be subject to sanctions if it is found that it did not comply with its various duties under the DPA.

It remains to be seen whether the schoolboy arrested in connection with the cyber-attack will succeed in his apparently ironic allegation that his own privacy has been breached. 


Consumer Ombudsman service launches
Monday 19th October 2015

The Ombudsman Service has expanded recently with the launch of the Consumer Ombudsman.  The new ombudsman service has been created to deal with complaints about goods or services in any sector not already covered by an ombudsman.

There are long-established Ombudsmen to deal with complaints regarding financial services, property, pensions, legal services, communication, energy, glazing and furniture.

The Consumer Ombudsman was launched in August to deal with complaints about goods or services in other sectors.  The Ombudsman Service reports that last year it received 66 million complaints about poor quality products and services.  This new service provides a new option for consumers who may prefer this free and independent alternative means of dispute resolution to the costs and time involved in pursuing their complaint through the Court process.

As with all Ombudsman complaints the consumer must first pursue the matter through the supplier’s own internal complaints process giving them a reasonable period of time to respond.

The launch of this new service is good news for consumers who at the same time have been boosted by the overhaul of consumer rights implemented by the new Consumer Rights Act which came into force at the start of October.