High Court finds right of freedom of expression outweighed by right to privacy in relation to press coverage of police investigation

In a recent decision, the High Court engaged in the exercise of balancing a broadcasting organisation’s right to freedom of expression under Article 10 of the European Convention of Human Rights (“ECHR”), against the right to privacy of the target of a police investigation under Article 8 of the ECHR. It was held that the subject of the investigation had a legitimate expectation of privacy in respect of the fact of the police investigation and that the Article 8 right outweighed the Article 10 right on this occasion: Sir Cliff Richard OBE v The British Broadcasting Corporation and The Chief Constable of South Yorkshire Police [2018] EWHC 1837 (Ch).

The BBC has indicated in a recent press release that it may appeal the decision, stating that the High Court judgment “creates new case law and represents a dramatic shift against press freedom” which is not “compatible with liberty and press freedoms”. Hyperbole aside, this judgment has provided welcome clarification of certain aspects of the law of privacy.

First, the court held that “on the authorities, and as a matter of general principle, a suspect has a reasonable expectation of privacy in relation to a police investigation”. In making that ruling, the court paid heed to the reality of the social stigma which surrounds suspects in police investigations, acknowledging that the presumption of innocence is not perfectly understood and applied, and the public is not universally capable of keeping an open mind.

Secondly, the court held that reputational damage can be taken into account in assessing damages for privacy claims. Reputational damage is not, therefore, the sole province of defamation (as the BBC had argued).

As a matter of more general interest, in weighing the claimant’s Article 8 rights more heavily than the BBC’s Article 10 rights, the court accorded substantial weight to the questionable way in which he found the BBC had obtained its information. This will no doubt place the motives and methods of media organisations, and what may previously have been regarded by them as “good old fashioned journalism”, under potentially uncomfortable scrutiny.

Neil Blake, Christopher Cox and Angela Liu consider the decision further below. Continue reading

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Court of Appeal decision underlines high threshold for implying terms into a contract

The Court of Appeal has overturned a High Court decision to imply a contractual term into a loan agreement entered into between a brokerage firm and an intended partner in that firm, to the effect that the loan must be repaid if the individual did not serve an initial four-year term of employment: Robert Bou-Simon v BGC Brokers LP [2018] EWCA Civ 1525.

This case is a reminder of the strict approach which English courts adopt when asked to imply a term into a contract. It is necessary to construe the express terms of the contract before considering whether a term should be implied. The court may not apply hindsight, but must consider the position at the time the contract was formed. The court cannot imply a term simply because it seems fair or because the court considers that the parties would have agreed to it had it been suggested to them.

The Court of Appeal also made some interesting obiter comments about the admissibility of words which were included in a previous draft of the agreement but omitted from the final version. In particular, Lord Justice Singh observed that in the context of considering implied terms (as distinct from construing express contractual terms) he would not necessarily accept that there is an ambiguity threshold which must be satisfied in order for deleted words to be admissible.

Zoe Wood in our London dispute resolution team considers the decision further below. Continue reading

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High Court finds strike out of response to unfair prejudice petition does not automatically entitle petitioner to relief

In a recent judgment, the High Court has considered the extent to which petitioners in relation to unfair prejudicial conduct of a company’s affairs can obtain relief simply on the basis that a respondent’s defence has been struck out: Re Bankside Hotels Ltd, Re Pedersen (Thameside) Ltd, Re G&G Properties Ltd [2018] EWHC 1035 (Ch). The decision reconfirms that, because relief from unfair prejudice is at the court’s discretion, the court must satisfy itself that unfair prejudice has occurred even where the allegation is no longer contested.

The court held that CPR 3.5, which allows a party to obtain judgment without the need for a trial where its opponent’s statement of case has been struck out, did not apply to unfair prejudice proceedings. The precise application of the CPR to unfair prejudice proceedings remains uncertain. However, the approach taken by the judge is instructive – the underlying principle of the statutory scheme is that the judge must be satisfied that a petition is well founded and, as a result, provisions of the CPR which deny the judge the opportunity to consider whether he or she is so satisfied will not apply.

Gary Milner-Moore and Andrew Cooke consider the decision further below. Continue reading

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Filed under Evidence, Interim applications, Judgments/Orders, Remedies

Herbert Smith Freehills contributes England and Wales chapter of The Securities Litigation Review

Securities litigation presents an increasing threat to UK corporates, with the potential for both regulatory action and civil claims by investors seeking recovery of losses suffered as a result of investing in applicable securities.

Karen Anderson and Harry Edwards have contributed the England and Wales chapter of The Securities Litigation Review (now in its fourth edition) which considers the potential forms of liability and the procedures that may be used to bring claims. The chapter looks at both private and public enforcement and considers cross-border issues, as well as looking at particular developments over the past year and considering the future outlook for securities actions. A number of these issues are also considered in the shareholder claims chapter of our new textbook Class Actions in England and Wales, recently published with Sweet & Maxwell.

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Filed under Announcements, Class actions, Miscellaneous

Court of Appeal finds clause limiting liability for negligence was reasonable

The Court of Appeal has recently upheld a High Court decision that a term limiting a defendant’s liability for negligence in the supply of a fire suppression system had been properly incorporated into the contract and that it met the test of reasonableness under the Unfair Contract Terms Act 1977 (“UCTA”): Goodlife Foods Ltd v Hall Fire Protection Ltd [2018] EWCA Civ 1371.

The clause in question was contained in Terms and Conditions that were referred to in and attached to the defendant’s quotation. The clause was held to be incorporated into the contract on the basis that it was not particularly unusual or onerous and, in any event, had been fairly and reasonably brought to the attention of the claimant.

The court held that there was no basis to find that the clause was unreasonable as, amongst other factors, the parties were of equal bargaining power, the claimant had its own insurance, and the claimant had been given an option of contracting without the clause but at a higher price.

The judgment emphasises the increasingly hands off approach taken by the courts to contracts agreed between commercial entities of equal bargaining power. As the Court of Appeal commented, “the trend in the UCTA cases decided in recent years has been towards upholding terms freely agreed, particularly if the other party could have contracted elsewhere and has, or was warned to obtain, effective insurance cover”.

Whilst the decision does not establish new principles, it is a useful review of the law on exclusion and limitation clauses and indicates the current trend of judicial analysis in such cases. For more information on such clauses see our contract disputes practical guide on liquidated damages, limitation and exclusion clauses. Continue reading

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Court of Appeal finds non-shareholder creditor’s claim barred by rule against reflective loss

In a recent decision, the Court of Appeal has clarified the ambit of the so-called rule against reflective loss, which has traditionally operated to prevent shareholders from bringing claims where their loss merely reflects the loss suffered by the company: Carlos Sevilleja Garcia v Marex Financial Limited [2018] EWCA Civ 1468.

The question for the Court of Appeal was whether the rule applies to claims by unsecured creditors who are not shareholders of the relevant company. In a unanimous decision, it held that the distinction between shareholder creditors and non-shareholder creditors was artificial and therefore the rule should apply equally to all creditors.

The Court of Appeal also considered the scope of the exception which applies where the company is unable to pursue a cause of action against the wrongdoer. It confirmed that this exception can only be invoked in limited circumstances, where the defendant’s wrongdoing has been directly causative of the impossibility the company faces in bringing the claim.

Catherine Emanuel and Eliot Leggo consider the decision further below. Continue reading

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Filed under Miscellaneous, Remedies

Misrepresentation claim struck out on basis that entire agreement statement excluded liability

The High Court has held that an entire agreement clause in a commercial contract had the effect of excluding liability for misrepresentation under section 2(1) of the Misrepresentation Act 1967: NF Football Investments Limited v NFFC Group Holdings Limited [2018] EWHC 1346 (Ch).

This contrasts with the orthodox view that the effect of an entire agreement statement is merely to avoid pre-contractual representations becoming terms of the contract, and that such a statement will not, in itself, exclude liability for misrepresentation (as noted for example in our contract disputes practical guide on pre-contractual statements).

The decision notes that clauses which effectively exclude liability for misrepresentation will ordinarily be expressed using well-established formulations, such as non-reliance wording (see our post earlier on a recent Court of Appeal decision which considered a non-reliance clause) or an express statement that liability is excluded. However, it emphasises that an entire agreement clause (like any other) must be construed in its contractual context. To put it another way, there are no magic words that must be used.

As a practical matter, to avoid any dispute, parties seeking to exclude liability for misrepresentation would be well advised to stick to the well-established formulations – not least as this is a decision of a Master, and there is no guarantee that the same approach will be taken in other cases. It shows, however, that a departure from those formulations need not always be fatal. Continue reading

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Filed under Contract, Tort

Court of Appeal finds non-reliance clause sought to exclude liability for misrepresentation and was therefore subject to UCTA reasonableness test

The Court of Appeal has found that a “non-reliance” clause in a lease was a term that excluded or restricted liability for misrepresentation. The clause was therefore within the scope of s.3 of the Misrepresentation Act 1967 (“MA”) and subject to the reasonableness test under s.11(1) of the Unfair Contracts Terms Act 1977 (“UCTA”): First Tower Trustees Ltd v CDS (Superstores International) Limited [2018] EWCA Civ 1396.

Some key points from the Court of Appeal’s analysis include:

  • Where a clause simply delimits the parties’ primary obligations, it is not an exclusion clause and therefore the reasonableness test in UCTA will not apply. Such clauses define the basis on which the parties are contracting. Lewison LJ, who gave the leading judgment, suggested that this is how the label “basis clause” in some of the cases should be understood, though Leggatt LJ, who delivered a concurring judgment, suggested that the term is best avoided in the interests of clarity.
  • A non-reliance clause, in contrast, seeks to prevent liability arising in misrepresentation by stating that no representations have been made or, if made, have not been relied on, and therefore setting up a contractual estoppel. The Court of Appeal held that such a clause amounts to an attempt to exclude liability for misrepresentation. Accordingly, it is subject to s.3 MA and therefore the reasonableness test under s.11 UCTA.
  • Leggatt LJ commented (obiter) that it does not matter whether the non-reliance clause is contained in a contract entered into after the representation was made (as in this case) or before it (eg in a confidentiality agreement entered into before the main transaction). Where it is in a contract agreed before the representation, however, it might affect whether the elements of the misrepresentation claim are in fact established, eg whether a particular communication would reasonably be understood as making a representation or whether it was in fact relied on.

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Filed under Contract, Tort

Article published on how in-house lawyers can tackle the increasing threat of class actions in the English courts

Class actions represent an increasing area of risk for UK corporates, with increasing numbers of high-profile and high-value group claims being brought, or threatened to be brought, in the English courts. The principal mechanism used to litigate these claims differs from the ‘opt-out’ class action familiar from the US, where claimants who fall within a defined class are automatically included unless they take steps to opt out. In contrast, claims in the English courts normally proceed on an ‘opt-in’ basis, with claimants issuing claims which are then managed together by the court under a Group Litigation Order (or GLO).

Damian Grave, Gregg Rowan and Maura McIntosh have published an article in the Summer Edition of the In-House Lawyer magazine which explores the reasons for the rise in group litigation in England and Wales and considers what strategies defendants can bring to bear to improve their position in such cases. Click here to view a PDF.

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Filed under Announcements, Class actions

Brexit White Paper reiterates aims for civil judicial cooperation

The UK government has today published its White Paper detailing its proposal for the future relationship between the UK and the EU. The short section on civil judicial cooperation echoes the aims set out in the government’s Framework for the UK-EU Partnership published on 13 June (as outlined here).

The White Paper recognises the benefits of civil judicial cooperation for both the UK and the EU, including that it gives businesses legal certainty in the event of disputes and makes them more confident trading across borders. It says, uncontroversially, that the future relationship between the UK and the EU should protect these advantages.

The paper reiterates the government’s intention to seek to participate in the Lugano Convention post-Brexit, noting however that “while the UK values the Lugano Convention”, some of its provisions have been overtaken (a reference, no doubt, mainly to the stronger protections for exclusive jurisdiction clauses under the recast Brussels Regulation) and it is limited in scope. It adds that the UK is keen to explore a new bilateral agreement with the EU, which would cover a coherent package of rules in civil, commercial, insolvency and family matters.

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Filed under Choice of law, Enforcement, Jurisdiction