Litigation update: January 2016
Published on 15th Jan 2016
In this edition, we look at the Supreme Court’s reinstatement of the high bar that a party needs to establish for the court to imply a term into a contract. We examine further developments in the PAG v RBS litigation, on the perennially problematic issue of legal privilege, and consider the “notoriously difficult” subject of mitigation of damages.
We also include a review by Osborne Clarke’s Head of Business Crime, Jeremy Summers, on the key developments in corporate crime during 2015 and what these might mean for businesses in the future.
Finally, we discuss key developments of interest to dispute resolution lawyers expected in 2016, including Lord Justice Briggs’s review into the civil courts structure.
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The Briggs Review: interim report calls for online court and structural reforms
On 12 January 2016 Lord Justice Briggs published his interim report on the structure of civil courts in England and Wales. The interim report calls for the establishment of a new ‘online court’ to deal with lower value disputes, along with a unified system for the enforcement of civil judgments.
The interim report also calls for reforms to the structure and allocation of work within the existing civil court system, including the promotion of regional centres to hear more big-ticket litigation, changes to routes of appeal, and more work being transferred from judges to non-judicial case workers.
Privilege: further developments from PAG v RBS
In our July 2015 litigation update we discussed an interlocutory judgment in the on-going case of PAG v RBS, arising out of the disclosure exercise in that case. Since then, the parties have been back to court on related issues arising out of that same disclosure exercise and applications by both parties to amend their pleadings.
Three judgments coming out of those hearings raise important issues on other aspects of privilege, including: the role of external lawyers, an attempt to reclaim privilege that had been deemed to have been waived by a party’s pleading, and the unavailability of privilege where a witness was deceived as to the purpose of a meeting.
Implied terms: Supreme Court restates the test
When drawing up contracts, parties take great care to fully capture the parties’ understanding of how the contract is intended to work. Invariably, however, points will remain unsaid, in some cases because it is so obvious as to go without saying. Where the courts accept this to be the case, they will imply appropriate terms into the contract. Implied terms often form part of a dispute, either where it is accepted that no such express term applies or as a fall-back argument, should a primary argument based on construction of an express term fail.
In Marks and Spencer v BNP Paribas, the Supreme Court reiterated that the bar for a term to be implied is a high one. The classic ‘officious bystander’ and ‘business efficacy’ tests have been reinstated, and should not be taken to have been watered down by more recent case law.
Mitigation of loss: when does a benefit need to be taken into account?
A recent Court of Appeal judgment provides clarification on a notoriously difficult aspect of the law on mitigation of loss, where the ‘innocent’ party obtains a benefit as a result of the actions it takes in attempting to limit its losses. The court considered whether that benefit should be taken into account to reduce that party’s claim in losses.
Corporate crime: 2015 in review and how it may inform the future
2015 was a year of significant developments in the corporate crime arena. Jeremy Summers, Osborne Clarke’s Head of Business Crime, takes a look back at the year and explains what the key developments might mean for corporates in 2016 and beyond.
Key headlines included: the first conviction after trial in the LIBOR investigation, the first use of a Deferred Prosecution Agreement, the first use of the Bribery Act section 7 offence of failing to prevent bribery, and a more aggressive approach by the SFO to independent legal advisers representing witnesses in corporate investigations.
What’s coming up in 2016?
Aside from Lord Justice Briggs’s final report, discussed above, which is due by the end of July 2016, other key developments expected in 2016 include: significant investment in electronic working in the courts, the EU Online Dispute Resolution platform going live, changes to costs management and further increases in court fees.
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