Litigation Update | August 2017

Written on 3 Aug 2017

Welcome to the latest edition of Osborne Clarke’s Litigation Update.

In this edition, we look at the issue of directors’ personal liability. We have just published the latest version of our Regulatory Outlook, in which we focus on how regulators across a number of different areas of business regulation are increasingly using personal liability as a lever to drive corporate compliance. In this Litigation Update we report on two recent cases in which the courts have looked at directors’ liability for civil claims.

With the UK and EU having now concluded the second round of Brexit negotiations, we ask what might replace the current framework for the mutual recognition and enforcement of judgments between the UK and EU Member States. For a guide to the current framework for enforcing judgments and arbitration in England and Wales, see the chapter that we have authored for Practical Law’s global enforcement guide. We also consider the Repeal Bill, by which the government intends to ensure that the current body of EU-derived law is retained, and where necessary, corrected, immediately post-Brexit.

Other disputes developments of note include a landmark decision on litigation privilege, which could have major implications particularly for internal investigations, and an upcoming pilot of a new Online Court for lower value money claims.

Finally, we review a recent decision on the cost consequences of refusing to mediate and ask whether it will affect parties’ willingness to settle disputes through mediation.

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.

Court rules that normal limitation periods do not apply to claims against directors for fraudulent breach of duty

The Court of Appeal has found that claims against directors for breach of their fiduciary duties will not be subject to the usual six year limitation period where that breach was fraudulent. It does not matter for these purposes whether or not the breach involved handling any property belonging to the company. This applies equally to executive and non-executive directors.

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Court allows claims against director based on economic torts, and dismisses jurisdiction challenge

A recent judgment offers welcome clarification of the English courts’ approach to the ability of judgment creditors to bring claims against individual directors of judgment debtors in certain circumstances, based on ‘economic torts’. The existence of separate insolvency proceedings involving the judgment debtor company did not prevent the English court from having jurisdiction in relation to the claim. 


Post-Brexit: mutual recognition and enforcement of UK and EU judgments

With exit negotiations now well underway, the EU and the UK now have less than two years to negotiate the conditions of their future relationship. Among numerous issues to address, it is in both sides’ interests to ensure there remains an effective legal framework for mutual recognition of judgments.


Brexit and business: the Repeal Bill has been published – why does it matter?

The much-anticipated European Union (Withdrawal) Bill (better known as the Repeal Bill) was published on 13 July 2017. The purpose of the Bill is to incorporate all EU law into UK domestic law as at the date of Brexit. Its publication is a significant development, but it is likely to come under intense scrutiny in Parliament.


Enforcement of Judgments and Arbitral Awards in the UK

We have recently authored the UK chapter of Practical Law’s ‘Enforcement of Judgments and Arbitral Awards in Commercial Matters Global Guide’. This provides a detailed explanation of the approach of the English courts to enforcement of foreign judgments and arbitral awards.

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Latest privilege decision limits scope of litigation privilege

A significant decision by the High Court has recalibrated the scope of litigation privilege. The ruling will be of particular importance to those facing criminal or regulatory investigation, and their professional advisors, but will also be relevant to any business that is involved in a commercial dispute.


Are you ready for the new Online Court?

Businesses that regularly deal with lower value claims (below £25,000) involving consumers and small businesses need to be aware of the new Online Court. The Online Court was due to be launched in an invitation-only pilot stage at the end of July 2017. The pilot phase will be more evolution than revolution. However, work flows, IT systems and staff training may need to be adapted to ensure you are ready for the full roll-out of the new court.

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Mediation: “vindicated” claimant escapes sanction for refusal to mediate

A recent Court of Appeal decision has rowed back from the high-water mark of judicial encouragement of mediation. Will this case result in a pause or slow-down in the growth of mediation?

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Supreme Court clarifies when damages for breach of contract need to be reduced for benefits obtained after the breach

The Supreme Court has clarified the legal test for when actions taken after a breach of contract can be taken into account as mitigation of loss, thereby reducing the damages that the innocent party is entitled to. In this case, although the actions taken were a commercially reasonable response to the situation, they were not legally caused by the breach. As a result, the benefit obtained as a result of those actions could not be taken into account to reduce the amount of damages owed. 


Don’t leave it too late to accept a Part 36 settlement offer

Part 36 offers can be an important tactical tool, to either force settlement or provide cost protection if offers are not accepted. It is important to keep offers made by any party under review, as circumstances can change quickly and offers may need to be accepted or withdrawn swiftly. However, a recent case clarifies that the court is unlikely to allow a party that sees the wind blowing against it during trial to accept an offer at that late stage.

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