Welcome to the first edition of our new-look Litigation Brief. These updates are designed to bring you up to speed quickly with recent cases which might impact on your practice. The cases covered in this update focus on settlement, confidentiality and litigation-related costs.
If you would like to discuss any of the issues raised in this update, please contact one of the experts listed below, or your usual Osborne Clarke contact.
Will your settlement agreement be binding if all one party is doing is promising not to pursue a defence to the original debt?
A settlement agreement, like any other contract, requires consideration (broadly, the provision of something of value) to be binding. This can be particularly problematic for settlements where one party avoids being sued in return for agreeing to do something which it had previously agreed to do anyway (such as pay a debt already owing).
The issue in a recent Court of Appeal decision was that the debtor didn't just promise to pay the same debt, it also promised not to pursue a defence that that debt was unenforceable in law. This was held to be good consideration.
Can you rely on your confidentiality clause in all circumstances, and what remedies might you have if you can't?
Confidentiality clauses are an important protection for parties wishing to share information. Will the confidentiality in your agreement be watertight?
In a recent case, a bank called in private investigators, who signed a retainer containing strict terms as to confidentiality. Following their investigation, the investigators disclosed documents and information to various outside parties, including Cypriot and US regulators.
The bank obtained a declaration that the investigators had breached their confidentiality obligations and the investigators were restrained from making any further disclosure. But claims for an account of profits or the legal costs incurred in seeking the return of confidential information failed, demonstrating the difficulties in obtaining effective remedies in breach of confidentiality claims.
Can you recover for staff investigation time when you are involved in litigation?
Preparing for, and being involved in, litigation is costly and time-consuming for companies. Many hours of staff time might be diverted, thus resulting in a loss of revenue.
Lost internal management and staff time spent unravelling and mitigating the defendant's unlawful behaviour may be recoverable as damages. By contrast, costs of preparing for litigation can only be recovered as costs, not as damages.
This principle was examined in a recent case in which the claimant sought to recover his costs in investigating an alleged conspiracy. The judge found that these were litigation costs and as such could only be recovered as damages if the claim to recover those costs was based on a separate cause of action – which was not the case here.
Straight to the point of dispute resolution
In this series of short videos, Adrian Lifely provides bite-size insights into a number of frequently raised questions in relation to dispute resolution.
In the latest video in the series, Adrian addresses the question: should I use litigation funding?