Litigation Update | Remote trials, disclosure, ‘material adverse change’ clauses and Brexit

Written on 28 Jan 2021

Welcome to the latest edition of Osborne Clarke's Litigation Brief.

Inevitably, the ongoing pandemic continues to impact on contractual and procedural issues. We take a look at some of the most recent developments as well as some considerations in relation to preserving and sharing evidence. We also consider where things now stand in relation to jurisdiction clauses under the new UK-EU relationship.

Covid-19

Material Adverse clauses: do they work during a pandemic?

A Material Adverse Effect or Material Adverse Change clause allows a party to pull out of the agreement, without cost, where there has been a material change before signing. Generally, the clause will be drafted in such a way that it is not triggered where there have been external changes to a market or industry, and instead will require a change which impacts the particular company in question. That is because the company might out-perform its industry.

A recent case, though, supports the view that, if the wording of the clause allows, it can be triggered even where it is not just the company that is affected.

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Courts give guidance on remote trials

The move to most trials being held remotely during the pandemic has been, on the whole, a success. It remains to be seen how far the changes will be adopted once normal life fully resumes. Two recent cases have looked at issues which have arisen from remote hearings.

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Civil litigation

For attorney's eyes only: who gets to see commercially sensitive documents during litigation?

If a document is relevant, and not privileged, it will have to be disclosed during the disclosure process even if it is confidential. But arrangements can be made limiting precisely who can see commercially sensitive documents. In a recent decision, the Court of Appeal gave some guidance as to how this should be done.

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When do you need to pause your document retention policy due to litigation?

Once litigation starts, a party must preserve documents and stop any automatic deletion of its documents. But how far back does that duty start? That was an issue considered in Winlink Marketing v Liverpool FC.

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Brexit

What does the new UK-EU relationship mean for English jurisdiction clauses and judgments?

Now that the Brexit transition period has ended, the recast Brussels Regulation has ceased to apply in the UK. The Hague Convention on Choice of Court Agreements 2005 has now entered into force for the UK as a party in its own right and will apply to new contracts. But the European Commission has cast doubt over the position when it comes to new disputes about contracts entered into before 1 January 2021.

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