Welcome to the latest edition of Osborne Clarke’s Litigation Update.
With Article 50 having now been triggered, we have published an updated set of articles on the legal implications of Brexit, including what this might mean for dispute resolution, along with a focus on investor-state disputes.
While Brexit will feature in businesses’ forward-planning, there are more immediate steps that will need to be taken as the UK government presses ahead with an agenda of increasing corporate transparency and liability. We discuss two pieces of legislation that for many will require action now: the new duty to report on payment practices, which came into force on 6 April, and the upcoming new offence of failure to prevent tax evasion.
The trends in both greater transparency and liability of corporates underscores the importance of a compliance function that is not only fit for today, but future-proofed to deal with new obligations and risks. When potential issues do arise, it will be vital to conduct a thorough internal investigation. But as recent cases have shown, internal investigations can raise very difficult issues relating to legal privilege.
In other recent case of note, a decision on the meaning of “consequential loss” appears to mark shift away from a traditional Hadley v Baxendale interpretation, while we also discuss a case that continues the recent judicial focus on the literal interpretation of contract, even where that appears to go against commercial common sense.
We hope you enjoy these articles. If you would like to discuss any of the issues raised in any of them, please contact one of us using the contact details below, or your usual Osborne Clarke contact.
Brexit | Identifying the challenges and opportunities
Notice under Article 50 has now been served and the government has published its Great Repeal Bill white paper, setting out how it intends to convert the acquis of accumulated EU-based law into national legislation. Our Brexit feature page includes articles looking at what Brexit could mean for dispute resolution, along with a number of other areas of law including: IP, commercial, consumer protection, immigration and trade law.
We also ask what the future of investor-state disputes might look like post-Brexit, and what this might mean for businesses.
New duty to report on payment practices
New regulations, coming into force from 6 April 2017, will require large UK companies and LLPs to issue twice-yearly reports on their payment policies, practices and procedures. Failure to report will be a criminal offence by the corporation and its directors can be liable personally for knowing or reckless false reporting.
Failure to prevent tax evasion: are you prepared for the new corporate offence?
The new corporate offence, expected to be in force from this Autumn, is a Bribery Act style “failure to prevent” offence, with an unlimited fine and criminal record for corporations if convicted. Corporations need to have reasonable procedures in place to prevent the facilitation of tax evasion in place in order to establish a defence to the new offence. All corporations, irrespective of sector and size, need to understand what this might mean for them, and what actions they might need to take before the offence comes into force.
Protecting privilege in internal investigations
Internal investigations are more prevalent, and necessary, than ever as a means of managing the increased litigation and regulatory risks faced by companies, often globally. Companies conducting investigations should, however, take note of the recent English High Court decisions which confirm that legal advice privilege will not protect communications between a company’s employees and its lawyers, unless those employees are authorised to instruct the lawyers.
Obtaining early disclosure using FOIA and Subject Access Requests
With an increasing general awareness of rights of access to personal data and publicly held information, we look at two routes that are increasingly being used by litigants to obtain disclosure of information outside (and before) the CPR disclosure process.
The court of Appeal judgment in Dawson-Damer v Taylor Wessing strengthens the position for individuals making subject access requests, but will come as a disappointment to the many businesses that receive wide-ranging requests from individuals seeking to obtain documents for litigation purposes.
Meanwhile, a First Tier Tribunal decision provides useful guidance on using Freedom of Information Act requests as a litigation tactic for early disclosure in disputes against public authorities or where a public authority is a third party.
Words matter: literal meaning of contracts more important than commercial common sense or parties’ intent
A recent case in the High Court has reiterated that if the meaning of words in a contract is clear and unambiguous, common sense and the intention of the parties are irrelevant. The case also highlighted that the inconsistent use of terms such as “any” and “all” and the use of negatives in conditions could result in the court interpreting your contract differently to how you intended.
Consequential loss, but not as we know it: Commercial Court upholds a wide interpretation of a consequential loss exclusion
A Commercial Court judgment has given a wide interpretation of a contractual exclusion for “consequential or special losses, damages or expenses”, going beyond the traditional, narrower interpretation of consequential loss which most practitioners will be familiar with. The decision comes against the background of other judicial commentary questioning the traditional position and may mark a change in the Court’s approach.
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