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A B C D E F G H I J K L M N O P R S T V W Y

Dispute Resolution

Richard III: yet more skeletons in the closet
Thursday 11th December 2014

Following the discovery in 2012 of the remains of Richard III buried, somewhat unceremoniously beneath a council-run car park in Leicester, last week yet more revelations have emerged about the last Plantagenet monarch. Not only have we been provided with the gruesome details of his untimely death and of his various ailments but DNA analysis now suggests that he could well have been borne of maternal infidelity – a finding which brings into question the legitimacy of his reign as King.

Whilst the risk of litigation arising from improper due diligence cannot compare with aristocratic cuckolding insofar as public intrigue is concerned, any failure either to properly scrutinise M&A targets or to include adequate contractual safeguards in SPAs is certainly of greater contemporary significance.

The risk that the ‘standard’ skeletons in the closet, such key contracts not being secure or that a business is not financially viable, will always be at the forefront of the mind during the M&A process. However, the threat of historic mesothelioma claims coming to light should also be of the utmost concern – even in industries not directly involved in asbestos.

Such was the past ubiquitousness of asbestos as a building material that many claims are now made by ostensibly unlikely claimants including teachers and office-workers who were sadly exposed in the course of their employment. Because details of historic insurance can go missing over the years, particularly following restructuring, would-be corporate buyers should ensure that they are protected contractually against this significant risk and, in the event that claims do arise, appropriate advice is sought both in tracing insurers and in defending or minimising the financial impact of such claims on the newly amalgamated business. 


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Judicial Review Overturns Financial Ombudsman Service Decision on Jurisdiction
Tuesday 9th December 2014

A recent decision of the Administrative Division of the High Court has provided useful guidance on the jurisdiction of the Financial Ombudsman Service, as well as good news for insurers and brokers.

The judgment relates to a Directors’ and Officers’ liability (D&O) insurance policy and to whether a company director is a “consumer” under such a policy.

Mr. Wayne Lochner was a director of Betbroker Limited, an online gaming company.  The company took out a D&O policy with AIG Europe Limited (then Chartis Europe Limited) and the broker was Bluefin Insurance Services Limited.  Betbroker went into administration in 2008.

In 2008 legal proceedings were threatened against Mr. Lochner alleging that false representations had been made in the course of obtaining investments for the company.  Mr. Lochner denied liability.  Proceedings were commenced in September 2011 and were eventually settled at a loss to Mr. Lochner.  He sought to recover under the D&O policy.  The insurer rejected cover on the basis that it had not been notified of the potential claim before the policy expired in September 2008.

Mr. Lochner made a complaint against the broker to the Financial Ombudsman Service (FOS) on the basis that he had notified the broker before the policy had expired but that it had failed to pass this on to the insurer.

The FOS did not reach a decision on the merits of the complaint but they did decide that they had jurisdiction to hear the complaint.  Eligible complainants for the FOS include microenterprises, charities and trustees (depending on certain criteria), and also consumers.  The FOS decided that Mr. Lochner was a consumer because he had faced a direct claim and that his complaint was brought in his personal capacity in respect of a loss of policy benefits that would go to him personally.

The broker sought permission to bring judicial review proceedings in relation to that decision.  Permission was granted in February 2014 and Mr. Justice Wilkie gave judgment in October 2014.  Mr. Lochner was an interested party in the judicial review proceedings.

In R (on the application of Bluefin Insurance Services Ltd v Financial Ombudsman Service Ltd, Mr. Justice Wilkie concluded that Mr. Lochner was not an eligible complainant and therefore did not fall within the jurisdiction of the FOS.  Firstly, the Judge held that the point of time to consider eligibility was the date of the complaint.  Secondly, the Judge held that “the subject matter of his complaint was wholly concerned with the potential loss arising from lack of insurance cover in respect of liability which he had incurred in the course of his trade, business or profession”.  Therefore the FOS’s decision to hear the complaint was quashed.

The Judge drew a distinction with other group protection insurance policies, such as private health insurance policies, where a complaint can be made as a consumer.  Interestingly, the parties agreed that Mr. Lochner’s wife (who was insured under the policy in her capacity as Mr. Lochner’s spouse) would have qualified as a consumer.

The decision therefore is a restrictive view of the FOS’s jurisdiction.  It will be welcomed by insurers and brokers, but not by complainants who often see a complaint to the FOS as a preferable alternative to the costs and costs risk involved in commencing Court proceedings.
 


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Huge Increase in Solicitors Negligence Claims
Friday 5th December 2014

Recently released figures show that the number of professional negligence claims against law firms has almost tripled over the last 12 months.

The data, which has been released by the firm RPC, shows that the number of these claims in the High Court of Justice has jumped from 143 cases in 2012/2013 to 418 cases in 2013/2014.

It seems that the almost threefold increase in Court claims is the result of Claimants issuing claims before the expiry of the six year limitation period in relation to losses suffered during the economic crisis in 2008.  Claimants with professional negligence claims must act quickly to pursue their claim before the limitation period expires and their claim becomes time-barred.

These figures don’t include those complaints that have been submitted for investigation to the Legal Ombudsman Service.  Data released by the Ombudsman service shows that 7,995 complaints were submitted to the Ombudsman in the year 1 April 2013 to 31 March 2014.  Complainants continue to see the advantages of pursuing their claim with the Ombudsman compared with the costs risk of commencing Court proceedings.

The highest number of complaints made to the Ombudsman relate to legal work in the area of residential conveyancing.  This practice area alone made up 20.08% of complaints to the Legal Ombudsman Service in the year above.

The dispute resolution team at Brabners has wide experience of pursuing professional negligence claims, both through the Courts and using the Legal Ombudsman Service, and runs the specialist website at www.solicitorsnegligence.co.uk.


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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”.


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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. 


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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.


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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.


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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. 


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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.


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“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.
 


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