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Employment Tribunals – Fees, Costs and Frivolous Claims

31/05/2018 | Noel Deans & Sean Field-Walton
Background and Cost Orders It is old news that in R (on the application of UNISON) v Lord Chancellor the Supreme Court held that the regime of case filing fees for claims brought in the Employment

Background and Cost Orders

It is old news that in R (on the application of UNISON) v Lord Chancellor [2017] the Supreme Court held that the regime of case filing fees for claims brought in the Employment Tribunal was unconstitutional. Generally, comment has regarded this as a success for access to justice.

Employees with meritocratic claims should not be deterred from bringing them because of a fee structure like that which has now been overhauled and which required upfront payments of (generally) between £390 and £1,200. Nonetheless, employees should not be provided with an incentive to bring frivolous claims and to “bet the company” in the hope of receiving an undeserved pay-out.  Regretfully, this is arguably the current reality.

An up front fee regime was always inappropriate and statistics released since the Supreme Court’s decision in 2017 do suggest the fees as they were applied were a barrier to access to justice for individual claimants. However, we frequently act for employers and have seen that the tools available to them to fend off entirely false and opportunistic claims are inadequate.

Options when faced with a frivolous claim

1) Costs Orders

The successful party to proceedings before the Employment Tribunal does not have an automatic right to recover their legal costs from the unsuccessful party as they do in the civil courts. This is often surprising to those of our clients who have not been involved in Employment Tribunal proceedings before. A party may apply for a costs order where the unsuccessful party’s conduct has been unreasonable. This would include pursuing a baseless claim. Sadly, Employment Tribunal judges consistently demonstrate a reluctance to make such orders and when they do their scopes varies quite unpredictably between roughly 20-80% of the costs incurred.

2) Strike Out Applications

A party to proceedings may apply to strike out the other party’s case on a number of grounds. These grounds are set out in Rule 37(1) of the Employment Tribunal Rules of Procedure 2013 (as amended) (the “Procedure Rules”). The most common grounds relied on are that the claim has no reasonable prospect of success and/or that the claim or response is scandalous or vexatious. Just as is the case regarding applications for costs orders set out above strike out applications are rarely successful. This is even more so when the claim includes whistleblowing or discrimination elements because it is established law that in such cases the Employment Tribunal should be extremely slow to award a strike out.

3) Deposit Orders

Another option for a party to proceedings is to apply for a deposit order under Rule 39(1) of the Procedure Rules. These are granted more often than cost orders or strikes outs by Employment Judges but cannot be considered frequent. Furthermore, albeit the award may signal an Employment Judge’s lack of confidence in a claim, the effectiveness of deposit orders are hamstrung by the £1,000 limit on what an Employment Judge can order is paid into the Employment Tribunal.

Meaning for employer respondents

In our experience, the combination of the above often leaves employers in a difficult position. Given the unlikelihood of recovering their costs or successfully striking out a claim an employer is faced with the prospect of incurring significant legal fees (particularly during the disclosure process). In light of this, it is easy to see why an employer may consider that it is best to cut their losses and offer a pay-out even where they know the claims levelled against them to be falsified.

It is certainly correct to recognise the asymmetrical power structures between employers and employees.  However, perhaps it is time to rethink the infrastructure of Employment Tribunals to ensure that employers too are also provided with access to justice and not encouraged to settle false claims. A system which can easily be used to strong-arm employers into making unjustified pay-outs surely cannot be desirable from a legal or policy perspective.

Moving forward

Our view is that the Supreme Court’s decision was correct. However, without encouraging Employment Judges to utilise the powers available to them to dissuade litigants from putting employers to costs in the hope of extracting a pay-out the system does seem loaded in favour of potential opportunist claimants. This is no fault of the Supreme Court’s. It is not their duty to legislate for a supplementary structure following their effective abolition of Employment Tribunal filing fees. Instead, we suggest that in light of the Supreme Court’s decision Parliament should consult on the issues set out in this bulletin. Our expectation is that our observations would be shared.

It may be time to reconsider the position that the unsuccessful party does not have to meet any of the successful party’s costs unless the successful party makes a successful costs application. Perhaps any such rule will need to be a diluted version of the same rule in the civil courts.  Maybe this could be in a rule that costs will follow the claim in an amount that the Employment Judge considers just having regard to all the facts of the case, including the strength of the evidence.

One way or another, the Employment Tribunal system and the practices within it may benefit from a recalibration so that access to justice is preserved for both the employee and the employer.

Our employment department has experience and expertise in all of the above areas.

 If you would like any further information, please contact Noel Deans at noeld@rosenblatt-law.co.uk or on 0207 955 1413.

This article should not be taken as definitive legal advice on any of the subject matter covered. If you do require legal advice, please contact Rosenblatt as above.

GDPR – what about business cards?

18/05/2018
Clock is ticking towards rollout of EU’s landscape-shifting data protection and privacy law. Time and tide wait for no man. And nor does GDPR. Business leaders take note: the countdown is almost

Clock is ticking towards rollout of EU’s landscape-shifting data protection and privacy law.

Time and tide wait for no man. And nor does GDPR.

Business leaders take note: the countdown is almost over. On 25 May 2018 the much vaunted and much daunted General Data Protection Regulation (GDPR) will be rolled out across the European Union. It will shift the data protection and privacy landscape for any business that controls or processes personal data. In practice that means each and every business must get its data house in order.

We take a look at the main features of the EU’s brainchild and where an age-old business tool fits into it all: the business card.

So, what about business cards?

If at a networking event someone hands you their business card, it’s dangerous to assume they’ve given you their unqualified consent to process their personal data carte blanche. Equally, it’s probably not necessary to recite your privacy notice while they consume a mini pastry or sushi in a spoon. It is however reasonable for them to expect you to contact them – so you’ve probably got their consent, at least to make initial contact.

It may not be so simple to establish legitimate interest when it comes to making contact beyond that initial approach. The Information Commissioner’s Office has recommended a three-stage test to establishing legitimate interest before processing a subject’s data

       1. What is the purpose of the data processing?

       2. Is the data processing necessary to achieve that purpose?

       3. Do the data subject’s individual interests override those of the legitimate interest?

We need to consider the likely intentions or expectations of the data subject when they hand over their business card. They probably expect to hear from you and may expect a follow-up email on the topics you discussed, but whether they want or expect to be added to your marketing database and receive promotional emails is another question entirely. It is prudent to seek specific consent for that purpose.

Ultimately, it is up to you as the data controller to consider whether the processing of personal data meets the criteria under GDPR.

Best practice when it comes to adhering to all aspects of GDPR is to give full and proper consideration to how you process personal data, and why. Your systems and policy for handling personal data cannot be too detailed or too thorough. It may be that an automated consent form is generated when any contact is added to your database. Alternatively your first email to that person could be tailored to ask them specifically to confirm their consent – but always give them the option to unsubscribe!

For more information on GDPR generally, keep reading.

What is GDPR?

GDPR replaces the outdated Data Protection Directive (introduced in the digitally-simpler days of 1995). In contrast to EU directives, national governments don’t need to enable GDPR, so it will be applicable in the United Kingdom (and across the EU) from day one.

GDPR is designed to tackle the challenges posed to data privacy that have evolved over the last two decades with the rise of increasingly complex and opaque data technology. It aims to give a greater degree of control to individuals over how their data is stored and processed. GDPR gives individuals (or “data subjects”) enhanced rights, such as the right to be informed about how their data is held, the right to restrict the processing of their data, or the right to be erased (or “forgotten”).

Above all however, GDPR introduces a new regime under which organisations are accountable for how they handle personal data. A key aspect of GDPR is the duty it places on businesses (and their data processors) to manage and monitor their own data management protocol in a fair and transparent manner.

It is no longer adequate to simply deal with data issues as they arise. In this new world order organisations must be able to demonstrate they have given proper consideration to how they will comply with the rules of GDPR. From 25 May 2018, every business should have a GDPR protocol in place – and if they don’t, the consequences could be very expensive.

Why does GDPR matter?

The GDPR regime has teeth.

The penalties for non-compliance with GDPR will be severe.  A breach of the rules may result in a fine of up to €10 million or, if greater, 2% of a company’s global turnover. That penalty could be imposed for failing to promptly notify the supervising authority (in the UK, the Information Commissioner’s Office) of a data breach, or neglecting to keep adequate data processing records.

In the case of a serious breach, such as processing individuals’ data without their consent, offenders could face a fine of €20 million or, if greater, 4% of their global turnover.

Does GDPR affect my business?

GDPR is almost certain to affect your business because personal data (whether it is that of a customer, an employee or a supplier) is so intrinsic in the way organisations conduct their business in the digital era, whether it is stored electronically or not.

GDPR applies to both “controllers” and “processors” of personal data. If your business is responsible for handling personal data on behalf of another organisation, it is likely to be a processor under GDPR. If your business is not a processor, the chances are it is a controller – meaning it determines the purpose, conditions and means of processing personal data. In some cases a business could be a controller and a processor.

However whether your business is a controller or a processor or both, it must comply with GDPR and have a lawful basis for processing personal data. If you are a controller, you must have a GDPR-compliant contract in place with all of your processors. If you are a processor, you also ought to consider protecting yourself by having a contract in place, as processors may now be accountable directly to data subjects.

What is “personal data”?

Personal data is any information from which a natural person can be directly or indirectly identified.

In the case of a business card, the personal data is pretty apparent – the data subject’s name, email, phone number and address, and any other information on the card which can be used to identify the person. The data subject can be directly identified by his or her name, but details such as a job title also allow indirect identification.

In other cases information which constitutes personal data may be less obvious, and could be anything from medical records to an IP address. As a rule, if a person can be identified through information, it is personal data as far as GDPR is concerned. It is clear that regulators will view the definition of personal data with a wide scope, so it would be prudent to have policies and procedures established to handle all forms of information.

How can we lawfully process personal data under GDPR?

GDPR sets out six bases upon which personal data can be lawfully processed:

 

  • Consent from the data subject to use their personal data for a specific purpose
  • A contract between the controller or processor and the data subject which makes the processing of their personal data necessary 
  • A legal obligation on the controller or processor which requires the personal data to be processed
  • It is in the vital interest of a data subject for their personal data to be processed
  • The processing of the personal data is necessary to perform a public task
  • It is in your legitimate interest (or that of a third party) to process the personal data (but this will not override the interests of the data subject).

In everyday business, most people would expect to rely on consent or legitimate interests, but even then it’s best to tread carefully. Speak to a data protection and privacy expert to create a bespoke plan to ensure your business is GDPR compliant.

Rosenblatt’s Commercial team advises on GDPR compliance and data protection policies in addition to its media/technology/IP expertise. For more information, please contact Chris Pulham.

The content of this bulletin should not be construed as legal advice. If you do require legal advice, please contact a solicitor at Rosenblatt.

 

Wrotham Park no more – moving forward with negotiating damages

03/05/2018 | Noel Deans & Sean Field-Walton
Morris-Garner and another (Appellants) v One Step (Support) Ltd (Respondent) UKSC 20 In Morris-Garner the Supreme Court had the opportunity to consider damages awards for breach of contract based o

Morris-Garner and another (Appellants) v One Step (Support) Ltd (Respondent) [2018] UKSC 20

In Morris-Garner the Supreme Court had the opportunity to consider damages awards for breach of contract based on the price that would have been hypothetically negotiated for releasing the restrictive term. It follows that from handing down of the judgment on 18 April 2018, Morris-Garner is now the leading case on the matter and should be a point of reference for practitioners and employers alike.

Background and Wrotham Park

The remedy for breach of contract is often given little more explanation than the often repeated phrase: “the measure of damages for breach of contract is to put the innocent party in the position that they would have been in had the contract been performed”. Damages are usually awarded in circumstances where a party can be considered to have suffered some financial loss through breach or non-performance of a contractual term. As such, they are usually considered compensatory. Nonetheless, in some cases, including those where enforcement is sought for breaches of restrictive covenants contained in employment contracts, injunctive proceedings in the High Court are another source of recourse.

There are, however, other scenarios where there is no clear economic loss suffered and an injunctive remedy is considered inappropriate. Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] was one such case. In Wrotham Park, a plot of land was sold subject to restrictive covenants on the development of a portion of that land. Ultimately, that land was transferred to a property developer who was not aware of the said restrictions. The developer proceeded to develop the land in breach of that restriction.

Despite being aware of plans to develop the land and a grant of planning permission, the party holding the right to enforce that restrictive covenant only made their objection known when they applied for an interim injunction against the developers. This was after the development had begun. Albeit the injunction was sought at an early stage of the development, Brightman J decided that although the claimant would ordinarily be entitled to an injunction it should be rejected as a matter of discretion. The state of law at the time suggested that no or nominal damages should be awarded as the claimant had suffered no financial damage from the breach of contract. Nevertheless, the claimant was awarded a sum equal to that which the Court considered they would have received on a negotiated release of the restrictive covenant; 5% of the developer’s anticipated profit. The award of damages on the basis of a hypothetical negotiation has until this point tended to be referred to as “Wrotham Park” damages. In Morris-Garner, the Supreme Court said that they prefer to call these “negotiating damages” and therefore we adopt this terminology for the purposes of this article.

The facts of Morris-Garner

Morris-Garner involved a joint venture between two defendants and the claimant. The joint venture provided rented accommodation and support services to enable vulnerable individuals referred by local authorities to live as independently as possible. In 2006, the first defendant transferred her 50% shareholding to the claimant in return for £3.15 million. The first defendant was subjected to confidentiality, non-solicitation and non-competition covenants running for three years. Within the restricted period and in breach of those restrictive covenants the first and second defendant founded and operated a business in competition with that of the claimant. In the words of Lord Reed who delivered the leading judgement on behalf of the Supreme Court in this case:

“[the claimant] sought an account of profits, or alternatively what were described as restitutionary damages, in such sum as it might reasonably have demanded as a quid pro quo for releasing the defendants from those covenants, or, in a further alternative, what were described as compensatory damages for the loss it had suffered by reason of the defendants’ breach of those covenants.”

                                                                                             Emphasis added.

The first instance judge applied Wrotham Park by saying that the claimant could elect to either receive negotiating damages calculated as the fee the defendants would have had to pay to be released from their obligation, or alternatively compensatory damages in the form of lost profits or possibly goodwill. At the Court of Appeal, this decision was upheld. That Court considered the test for whether negotiating damages could be awarded was whether an award of damages on that basis was a just response in the particular case which was a matter for the judge to decide on a broad brush basis.  The Supreme Court ruled that both the first instance judge and the Court of Appeal had taken an approach that could not be considered to be correct. The salient areas of the judgment in Morris-Garner are set out below.

A theoretical objection?

At paragraph 91 Lord Reed dealt with what some had argued was a bar to the award of damages on a negotiated damages basis, namely that “[t]he use of an imaginary negotiation can give the impression that negotiation damages are fundamentally incompatible with the compensatory purpose of an award of contractual damages”. He did so by stressing that the relevant contractual right should be conceptualised as an asset and an economic value being given to the fact that a party had been deprived of it.

Understanding contractual rights as assets

He also accepted at paragraph 95(9) that the normal inference “[w]here the claimant’s interest in the performance of a contract is purely economic, and he cannot establish that any economic loss has resulted from its breach” would be that they have suffered no loss and in that event, they could not be awarded more than nominal damages. However, he goes on to explain at paragraph 95(10) that “negotiating damages can be awarded for breach of contract where the loss suffered by the claimant is appropriately measured by reference to the economic value of the right which has been breached, considered as an asset”. The hypothetical negotiating is only a means of reaching a value.

No right to elect how damages are assessed

In rejecting the approach taken by both the judge at the first instance and by the Court of Appeal, Lord Reed at paragraph 96 clarified that no claimant is entitled to elect how their damages are assessed. Part of this confusion may have been caused by a misunderstanding of the previous cases which could be seen as treating Wrotham Park assessments as some entirely separate means of assessing damages. Shutting down this view, Lord Reed emphasised that using an imaginary negotiation is “merely a tool” for assessing the value of a financial loss.

Concluding thoughts

Morris-Garner has been remitted to the lower courts for the Court to consider the financial loss and/or loss of goodwill which the claimant has actually sustained.

Claimants should be encouraged in that the Supreme Court has clearly enunciated that an inability to show clear financial loss is not necessarily the be all and end when seeking a damages award for breach for contract.

By providing authoritative clarification on an area of law with confused reasoning, Morris-Garner has narrowed the scope for seeking negotiating damages. The Supreme Court is clear that the ordinary inference if no clear loss can be proven is that no or nominal damages should be awarded.

Nonetheless, claimants should fully explore recovering damages on a negotiated damages basis where they cannot easily identify a financial loss but can put an objective economic value to a benefit protected by the contractual term that has been infringed.

Negotiating damages are not understood as a departure from ordinary compensatory damages. They are ordinary damages awarded following the use of a hypothetical negotiation used to assist a judge in calculating the economic value of an asset or a right that is taken or infringed through breach of a contractual term.

Our employment department has experience and expertise in all of the above areas.

 If you would like any further information, please contact Noel Deans at noeld@rosenblatt-law.co.uk or on 0207 955 1413.

This article should not be taken as definitive legal advice on any of the subject matter covered. If you do require legal advice, please contact Rosenblatt as above.

How far can a solicitor lien?

26/04/2018 | Charlotte Woodward
Gavin Edmondson Solicitors Limited v Haven Insurance Company Limited UKSC 21 Solicitors have long been entitled to a lien for payment of their costs and disbursements. A lien provides an equitable

Gavin Edmondson Solicitors Limited v Haven Insurance Company Limited [2018] UKSC 21

Solicitors have long been entitled to a lien for payment of their costs and disbursements. A lien provides an equitable form of security for solicitors agreed charges overs the fruits of the litigation. The solicitors’ equitable lien was developed to promote access to justice by allowing client’s with meritorious claims but without the financial resource to pay up front to pursue litigation on “credit”. This appeal, heard in February 2018, tested the limits, in the modern context, of the long established remedy.

The Facts

Several claimants were pursuing road traffic accident claims under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (the “Protocol”) against drivers who were insured by the Haven. The claimants entered into CFAs with their solicitors (“Edmondson”) and their claims were entered online in to the Road Traffic Accident Portal (the “Portal”) in line with the Protocol by Edmondson. Haven knew that the claims had been notified under the Portal but it then settled the claims directly with the claimants (offering to pay the claimants more and more quickly, if they did not use solicitors), thereby depriving the claimants’ solicitors of their costs. Edmondson claim against Haven was for the fixed costs which it should have been paid under the Protocol. Specifically Edmondson sought enforcement of a solicitor’s equitable lien.

Decision

The Supreme Court has now unanimously dismissed the appeal and upheld Edmondson’s claim. They found Edmondson was entitled to the enforcement of the traditional equitable lien against Haven, as the client owed a contractual duty to pay the solicitors’ charges.

The law in relation to lien traditionally depends upon:

  1. The client having liability to the solicitors for his charges;
  2. There being something in the nature of a fund in which equity can recognise that the solicitor has a claim; and
  3. Something sufficiently affecting the conscience of the payer at the time of payment, either in the form of collusion with the client to cheat to the solicitor or notice or knowledge of the solicitor’s claim against or interest in the fund.

Overriding the Court of Appeal, the Supreme Court found that there was a contractual liability between the claimants and Edmondson. The client care letter explained that Edmondson would be able to recover it costs from the losing side if the claimants won, so that the claimants would not need to put their hands in their own pockets. This did not mean that the claimants were not contractually liable, it merely limited the recourse, and provides for sufficient foundation for a lien to operate.

The settlement fund must have in some way been created by the Edmondson. The Supreme Court found that Edmondson’s actions in logging the claim on the portal contributed to the settlement in two ways. First, it supplied the details of the claim to the insurers, and second, it demonstrated   the claimant’s serious intention to purse the claim, and ability to do with the benefit of a CFA.

Provided that the debt has arisen in part from the activities of the solicitor there is no reason in principle why formal proceedings must first have been issued. This was emphasised as a matter of policy as all courts encourage parties to attempt to resolve disputes by suitable forms of ADR.

Once notified that the claimant in a road traffic accident has retained solicitors under a CFA, and that the solicitors are proceedings under the Protocol, they have the requisite notice and knowledge that sums cannot be paid to directly to the claimant or would result in interference with the solicitors’ interest with the fruits of the litigation. The court ordered Haven to pay Edmondson’s costs under the CFAs.

For more information on the case please click on the below link:

https://www.supremecourt.uk/cases/docs/uksc-2016-0010-judgment.pdf

 

When is hardball played too hard in the eyes of the Court?

27/03/2018 | Nick Leigh
The case of Al Nehayan v Kent The recent case of Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Ioannis Kent (AKA John Kent) EWHC 333 (Comm) recounts the breakdown of a friendship as well as a

The case of Al Nehayan v Kent

The recent case of Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Ioannis Kent (AKA John Kent) [2018] EWHC 333 (Comm) recounts the breakdown of a friendship as well as a business worth tens of millions of euros amongst acrimony, back-stabbing and even threats of personal violence. Yet it is made particularly notable by the judge’s comments on where the line should fall between the acceptable and unacceptable pursuit of commercial self-interest.

In 2008, Sheikh Tahnoon, an Abu Dhabi royal, and John Kent, a Greek businessman, entered into a joint venture [the “JV”]. Mr Kent had set up the Aquis group. Sheikh Tahnoon acquired 50% of Aquis Cyprus, the holding company, paying 4m euros, leaving Mr Kent owning the remaining 50%. The business purchased two hotels in Crete, along with the YouTravel website (via the purchase of Stelow Limited [“Stelow”], in which the Sheikh owned 60% and Mr Kent owned 40%).

In 2009, problems arose. Mr Kent sought cash injections from the Sheikh which meant that, by 2012, the Sheikh’s investment had ballooned to more than 31m euros. With the strain on the business causing a strain on their friendship, the Sheikh passed the matter over to his advisors, whose attempts to extricate their boss from the worsening financial problems included using Mr Kent’s fear that the business was about to fail as a means of getting him to sign a new agreement that left the Sheikh with the only assets of real value (the Crete hotels) [the “Framework Agreement”]. During the negotiations for the Framework Agreement, the Sheikh’s advisors made comments that Mr Kent took – and the Court found – to be veiled threats of serious physical violence against him if he did not sign up. Ultimately, the business failed anyway. Sheikh Tahnoon sued Mr Kent under the Framework Agreement for 15m euros. Mr Kent issued a counterclaim stating that the Sheikh had breached the fiduciary and contractual duties he owed Mr Kent under the original JV agreement.

Lord Justice Leggatt found that the Framework Agreement did not entitle Sheikh Tahnoon to the damages he sought. As well as concluding that Mr Kent entered into the agreement under duress (no great surprise in light of the threats of violence), the Judge also found that, whilst the Sheikh was not a fiduciary of Mr Kent’s, he nonetheless owed him a duty to act in good faith, and that by using Mr Kent’s fear that the business was about to fail as a means of extracting a better arrangement from the situation, the Sheikh (acting through his advisors) had breached this duty also.

The Judge found particularly egregious what he considered to be double-dealing by the Sheikh’s advisors in respect of FTI Touristik GmbH [“FTI”], a German tour operator that looked like it might provide help at a crucial juncture. Mr Kent spoke with FTI’s chief executive to discuss whether or not it (FTI) would be willing to accept delayed payment of sums it was owed by YouTravel. This evolved into a rescue plan for the JV, which would see FTI extend credit in return for two call options: one to buy the hotels in Crete for 40m euros (less liabilities) and the other to buy 40% of Stelow for £1. Mr Kent recommended to the Sheikh’s advisors that the FTI offer be accepted. However, whilst the Sheikh’s advisors did not oppose it, they would not agree to include in the Framework Agreement a clause that allowed Mr Kent to negotiate and conclude this deal. It was not until disclosure was provided by the parties in these proceedings that Mr Kent learned why: the Sheikh’s advisors were themselves negotiating with FTI at the same time without his knowledge, to sell them the Sheikh’s 60% shareholding in Stelow. Had the sale gone through, FTI would have become the majority shareholder, leaving Mr Kent still the minority. The judgment reports the Framework Agreement said that Sheikh Tahnoon “agreed to transfer to Mr Kent any remaining shares in Stelow once the “YouTravel solution” was concluded with FTI”, not that Mr Kent was sure to conclude the Framework Agreement as Stelow’s majority shareholder. Similarly, there is no reference to documents before the Court that precluded the Sheikh from entering into separate, secret negotiations with FTI in order to recover more of his money than he would otherwise receive. This did not prevent the Judge from finding this double dealing reprehensible, and a breach of a duty to act in good faith.

Was the Sheikh’s play hardball, but business is business? Or was Lord Justice Leggatt right to perceive such behaviour as being the untrammelled pursuit of his own best interests, which the Court had to prevent? This is not the first case in which the Judge construed the obligations between contractual parties as having, if not an actual fiduciary nature, then a wider obligation than may otherwise have appeared. In his judgment, he quoted from an earlier case of his, saying “[in Yam Seng Pte Ltd v International Trade Corp [2013] EWHC 111 (QB)] I drew attention to a category of contract in which the parties are committed to collaborating with each other, typically on a long term basis, in ways which respect the spirit and objectives of their venture but which they have not tried to specify, and which it may be impossible to specify, exhaustively in a written contract. Such ‘relational’ contracts involve trust and confidence but of a different kind from that involved in fiduciary relationships. The trust is not in the loyal subordination by one party of its own interests to those of another. It is trust that the other party will act with integrity and in a spirit of cooperation. The legitimate expectations which the law should protect in relationships of this kind are embodied in the normative standard of good faith.”

In Al Nehayan v Kent, Lord Justice Leggatt acknowledges that his construction of the terms of the Framework Agreement involves “some fairly muscular manipulation of the wording”. Whether or not this amounts to steering the outcome of the proceedings in equally robust fashion, the direction of the Judge’s thinking is clear: the Court is within its powers to take a view on whether or not business really is just business. Players of hardball should keep this in mind.

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