Please click here to preview our updated Guide to Dispute Resolution in Asia Pacific. To request a copy, please email email@example.com. Key topics covered in the guide include:
the basics of a legal system;
details on litigation and arbitration procedures;
if ADR is embraced in a particular country;
fee arrangements and third party funding;
recognition and enforcement of foreign judgments;
disclosure of electronic documents;
service of foreign proceedings.
The guide has been compiled by our network of Herbert Smith Freehills disputes specialists, with the assistance of local counsel in certain jurisdictions, led by Julian Copeman, Gareth Thomas and Priya Aswani.
The recast Brussels Regulation, which applies to proceedings commenced since 10 January 2015, contains various improvements over the previous version. These include provisions aimed at defusing so-called "torpedo" actions by which a party could seek to delay proceedings in the court the parties had chosen in their jurisdiction clause by commencing proceedings in breach of the clause elsewhere in the EU.
There has however been some doubt as to whether these new "anti-torpedo" provisions would be effective where the parties had agreed a unilateral or one-way jurisdiction clause (providing for example that one party must sue in England but the other is free to issue proceedings in any available jurisdiction), rather than an exclusive jurisdiction clause binding on both parties.
In a recent Commercial Court decision, the judge has expressed the view (though it was not necessary for his decision) that the provisions should apply equally to a unilateral clause: Perella Weinberg Partners UK LLP v Codere SA  EWHC 1182 (Comm). If this view is adopted in other cases, it will mean that a party who is required to sue in a specified jurisdiction under a unilateral clause will not be able to delay proceedings in that jurisdiction by launching a "torpedo" action elsewhere in breach of the clause.
James Allsop, a senior associate in our disputes team, considers the decision further below.
The UK's anticipated exit from the EU will have implications for many areas, including the enforcement of English court judgments across the EU. The ease (or otherwise) with which judgments may be enforced post-Brexit will depend on what arrangements are negotiated between the UK government and the EU.
Anna Pertoldi has published a post on Practical Law’s Dispute Resolution blog which considers the position post-Brexit and the potential options going forward to ensure the UK’s attractiveness as a jurisdiction is not diminished because of concerns over enforcement. Click here to read the post (or here for the Practical Law Dispute Resolution blog homepage).
In a recent decision, the Court of Appeal ordered the losing defendants to contribute to the costs the claimant was required to pay to the successful defendants, and clarified the circumstances in which such an order (a so-called "Bullock" order) may be made: Dixon v Blindley Heath Investments Limited and others  EWCA Civ 548.
Where a claimant has potential claims against more than one defendant, it may be reasonable to proceed against them all to establish which is liable. Ultimately, the claims may fail against one or more of the defendants, and the claimant may be ordered to pay the costs of the successful defendants. However, in some circumstances, the court may make a Bullock order, requiring the unsuccessful defendants to contribute to the costs the claimant is liable to pay to the successful defendants.
The present decision illustrates that the court's jurisdiction to make such an order is not confined to a narrow range of circumstances; the court will look at the position in the round in order to avoid injustice. This is clearly good news for claimants in such situations. Claimants should however remain cautious in proceeding against multiple defendants; it is clear from the decision that the courts do not wish to encourage multiple claims, and much will depend on whether it was reasonable to pursue a particular defendant.
Michael Mendelblat, a professional support lawyer in our construction disputes team, considers the decision further below.
On 21 June 2016 the Competition Appeal Tribunal (CAT) published details of the first application to bring a class action under the UK's controversial new competition law collective proceedings regime. The regime was introduced in October 2015 (see here) and allows representatives to bring collective proceedings in the CAT on behalf of consumers or businesses. Claims can be brought on either an opt-in or an opt-out basis subject to certification from the CAT: in opt-out cases the claim can be brought on behalf of a defined group, and aggregate damages awarded to the group, without the need to identify all the individual claimants and specify their losses. UK claimants within a class are automatically included in an action unless they take specific steps to opt-out.
Having threatened to bring an action earlier this year, lawyers for Dorothy Gibson, the General Secretary of the National Pensioners Convention (NPC), have now issued an application for an opt-out collective action seeking damages from Pride Mobility Products Limited on behalf of purchasers of Pride-branded mobility scooters. Despite it being widely expected that the first collective actions would be brought in cartel cases, the NPC claim instead relates to a form of resale price maintenance. It is based on a decision of the Office of Fair Trading, now the Competition and Markets Authority, in which the OFT found Pride had infringed competition law by prohibiting its retailers from advertising prices online below its recommended retail prices.
According to the CAT's summary of the application (see here), the proposed class is any person who purchased a new Pride mobility scooter in the UK in a specified period, and the issue common to all class members is whether the relevant infringements raised prices for consumers, and if so by how much. The application argues that the claim should be certified on an opt-out basis given the low level of individual damage and the vulnerability of affected customers. It also notes that the class members are easily identifiable, and that as they are final consumers there are no issues of passing-on that might complicate the analysis. The level of individual damages claimed, and potential difficulties in bringing individual claims, as well as the fact that the class members are final consumers, are likely to be important factors in the CAT's analysis of the application.
The next step will be for the CAT to hold a Case Management Conference to hear arguments on whether the collective action should be certified and if so on what basis. The CAT's decision will be closely watched, and the approach it takes is likely to have a significant impact on claimants' appetite to bring claims under the new procedure.
For a more detailed briefing from our Competition Disputes team please click here.
A recent decision of the Senior Courts Costs Office shows that the post-Jackson test of proportionality can mean a significant reduction in the costs a successful party can recover, even if those costs were reasonably incurred: BNM v MGN Limited  EWHC B13 (Costs).
The decision will be of particular interest to those defending claims commenced since 1 April 2013 (when the new test of proportionality took effect) where the claimant has the benefit of a conditional fee agreement (CFA) and/or after the event (ATE) insurance policy falling within an exception to the Jackson reforms – either because it was entered into before 1 April 2013 or because it falls within one of the exceptions to the Jackson reforms (including publication and privacy proceedings, as in the present case). The decision suggests that such arrangements will be subject to the new test of proportionality in the same way as other costs, and therefore may be more susceptible to challenge.
This is one of a number of recent decisions in which the courts have slashed the successful party's recoverable costs on grounds of proportionality. For example in May v Wavell Group Plc (reported on Civil Litigation Brief), a private nuisance claim which settled for £25,000, the court found the claimant's reasonable costs were just under £100,000 (of some £208,000 incurred) but awarded only £35,000 on grounds of proportionality.
Such decisions illustrate that parties who incur costs that are out of proportion to sums at stake cannot assume they will be able to recover them on success, even if they are both reasonably and necessarily incurred. That will apply even more strongly if Lord Justice Jackson's recent suggestions for a fixed recoverable costs regime for the "lower reaches of the multi-track" become a reality; he has suggested the regime should apply for cases up to £250,000 but recognised there is room for debate as to the figure. The government's policy on the issue is not yet clear.
Material adverse change (MAC) clauses aim to give buyers a right to withdraw from M&A deals on the occurrence of certain events that are detrimental to the target company. While MAC clauses have been a standard feature of US M&A agreements for many years, private acquisition agreements in the UK have not traditionally included MAC clauses. In recent years, however, there has been an increase in the number of buyers requesting the inclusion of MAC clauses in UK private M&A deals.
Neil Blake and Caroline Rae have published an article in the June edition of PLC Magazine in which they consider the use of MAC clauses in public and private deals in the UK, including recent case law interpreting such clauses and practical points for buyers when drafting them. Click here to download a copy.
The High Court has rejected jurisdiction challenges by a UK-domiciled company and its Zambian-domiciled subsidiary, allowing a group claim brought by 1,826 Zambian villagers in respect of alleged environmental pollution in Zambia to proceed against both companies: Lungowe & others v Vedanta Resources PLC and Konkola Copper Mines PLC  EWHC 975 (TCC).
This case will be of interest to companies which are headquartered in London but with operations run by subsidiary companies around the world. If a similar approach is adopted in other cases, it may be difficult for such companies to challenge English jurisdiction for claims against both parent and subsidiary based on acts of the subsidiary company abroad – though of course each case will depend on its precise circumstances including (importantly) the nature, scope and extent of the parent company's control.
John Ogilvie, partner, Joanne Keillor, senior associate, and James Robson, associate, in our disputes team consider the decision below.
A recent Court of Appeal decision clarifies the circumstances in which a bank will owe a duty of care in giving a reference for a customer: Playboy Club London Ltd & Ors v Banca Nazionale Del Lavoro SPA  EWCA Civ 457. The decision suggests that if a request:
deliberately chooses not to reveal the existence of an underlying customer (naming an intermediary instead); and
does not specify the purpose for which the reference is required;
then the underlying customer may not be able to rely upon the reference if the subject of the reference defaults.
Although the decision arises in the context of bank references, similar principles could be applied to other situations where a party wishes to obtain information from a third party while concealing its existence from that third party. In such circumstances, it may not be possible to establish that a duty of care was owed. For more information, please see our banking litigation team's e-bulletin on the decision.
Parties to commercial contracts commonly seek to set some parameters around what will happen in the event of a breach. They may for example agree a fixed sum that is payable on breach, or set a maximum sum for any damages, or exclude liability (or particular categories of liability) altogether.
Such clauses may not always have the effect the parties expect, either because of how they are interpreted by the courts or because they are held to be unenforceable as a result of statute or common law principles.
In this sixth of our series of contract disputes practical guides, James Baily, David Nitek and Gillian Fairfield consider the main types of clause that may be used and the extent to which they will (or will not) be effective, and provide some practical tips for commercial parties. You can click here to download the PDF guide.
Clients and contacts of the firm can also register to access the archived version of our webinar exploring these issues by contacting Jane Webber. The webinar lasts an hour and qualifies for one CPD point. Or if you would prefer a shorter version focusing on key practical tips, James has also presented this 10 minute podcast.
There are five previous editions in the series, listed below, which can be accessed from the home page for our contract disputes series (which is also linked under "our guides" in the top menu):
When do you have a binding contract? It may be more (or less) often than you think
What does your contract mean? How the courts interpret contracts
Pre-contractual statements: When can they come back to bite you?
How far can you act in your own self-interest? The role of good faith in commercial contracts
Endeavours obligations: How hard do you have to try?