Monthly commercial law update: Top 5 developments in January

Here's this month's top 5 commercial law developments taken from our January LexisPSL Commercial monthly round-up. If you enter your name and email address in the box on the right hand side of this page you can subscribe to receive all of the developments highlighted in our monthly round-up for free, along with other exclusive content courtesy of our new Comet newsletter. So, what are you waiting for? Sign up, sign up!

 Agency: High court considers application of Commercial Agency Regulations

The case of Charles Shearman (trading as Charles Shearman Agencies) v Hunter Boot Ltd [2014] EWHC 47 (QB considered the application of the Commercial Agents (Council Directive) Regulations 1993 SI 93/3053). The defendant was a well-known boot and shoe company, the claimant was a former agent of the defendant under a commercial agency contract which provided for termination. When the agreement came to an end, the claimant sought compensation and the defendant preferred to indemnify the claimant. The court held that the relevant clause in the agency agreement was not compatible with the underlying thrust of the Commercial Agents Regulations and that if the claimant was entitled to anything he was entitled to compensation. The case clearly underlines the fact that, unless the contract clearly states that an indemnity will apply on termination (or in determinable situations), compensation will apply. Clever drafting is not going to change that.

Consumer protection: Consumer Rights Bill introduced to parliament

The Consumer Rights Bill was introduced to the House of Commons on 23 January 2014 and received its second reading on 28 January. It now passes to committee stage with the committee’s report expected on 13 March. As well as the Bill and updated impact assessments, the government has published its Statement on Policy Reform and Responses to Pre- Legislative Scrutiny which explains how consumer rights are being reformed by the Consumer Rights Bill and answers the concerns raised by the House of Commons Business, Innovation and Skills Select Committee in its report analysing the Bill.

Contract law: Do limitation of liability clauses make damages an inadequate remedy when seeking injunctions?

 In AB v CD [2014] EWHC 1 the High Court considered whether a clause limiting liability for ‘indirect/special/consequential or incidental damages’ would render damages ‘inadequate’ for the purposes of the second limb of the test in American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504; he held that, on these facts, damages were an adequate remedy and so the injunction was refused.

Outsourcing: TUPE regulations published

The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 SI 2014/16 have been laid before Parliament and come into force on 31 January 2014. The Regulations apply to England, Wales and Scotland.

Tort: causation and the ‘but for’ test

The High Court has considered causation and the “but for” test in Greenwich Millennium Village Ltd and another v Essex Services Group plc and another [2013] EWHC 3059 (TCC), [2013] All ER (D)328 (Oct). Greenwich Millennium Village Ltd brought subrogated claims against the parties who originally designed certain flats that were destroyed as a result of a water leak. No single organisation had overall control of the design, installation, supervision, inspection, testing and acceptance of the boosted mains cold water system. The various different contracts and subcontracts resulted in pipework systems which, on completion, varied markedly from core to core, even though they should have been the same in each. The litigation involved five parties, with different defences and claims up and down the line, depending precisely on where the parties sat in the contractual chain. This case concerned a situation where concurrent and equally effective causes were responsible for the relevant losses and either cause would independently have resulted in the relevant losses being suffered. In such circumstances the traditional ‘but for’ test would lead to a conclusion that neither cause was responsible because the other cause would still have resulted in the losses being suffered. Before this case it was generally considered that the solution to such a ‘patently absurd’ conclusion was to depart from the ‘but for’ test and determine that both causes were responsible for the loss. This solution was confirmed by Coulson J in this case.

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