Monthly commercial law update: Top 5 developments in July


The kids are off and most offices consist of tumbleweeds and sheaves of hurriedly-typed holiday notes fluttering in the air-conditioned breeze.

In brief, the world is demob-happy. Well, most of it. For those who are left, there's still plenty of work that needs to be done, including keeping an eye on the latest legal developments.

So, in no particular order, here are this month’s ‘top 5′ developments, as extracted from our Lexis®PSL Commercial monthly round-up.

Agency law: European Commission publishes report evaluating the Commercial Agents Directive

The European Commission (EC) has published a report evaluating the Commercial Agents Directive (Directive 86/653/EEC).

The EC has concluded that Directive 86/653/EEC meets its objectives and functions well. Directive 86/653/EEC’s benefits outweigh its costs, it remains relevant and continues to have EU added value.

Based on these findings, it is recommended that Directive 86/653/EEC is maintained in its current form.

Consumer protection: CJEU clarifies the rules on consumer protection

The Court of Justice of the European Union (CJEU) has clarified the rules on consumer protection in relation to certain aspects of the sale of consumer goods and associated guarantees in Faber v Autobedrijf Hazet Ochten BV.

In the case, the claimant purchased a secondhand car from the defendant garage. A few months after the purchase, the vehicle caught fire while the claimant was driving and it was destroyed. The claimant claimed compensation from the garage for the damage caused by the apparent lack of conformity.

On appeal, the Dutch-referring court asked the CJEU to provide a preliminary ruling on the interpretation of Directive 1999/44/EC, arts 1(2)(a) and 5.

The CJEU confirmed that any lack of conformity which becomes apparent within six months of the delivery of goods is presumed to have existed at the time of delivery.

The judgment has provided further legal certainty for the consumer and seller, clarifying both the duty to inform the seller of any non-conformity and the burden of proof in disputes arising from allegations of non-conformity.

The guidance may also encourage consumers to notify sellers of any non-conformity earlier without first seeking professional reports on the origin of the issue

Contracts: High Court considers attempt to exclude Sale of Goods Act 1979 terms

In Saint Gobain v Hillmead the High Court has provided a helpful judgment neatly illustrating the court’s approach when considering whether attempts to:

  • exclude Sale of Goods Act 1979 (SGA 1979) terms as to quality,
  • exclude liability for a failure to inspect goods on delivery,
  • limit liability to the cost of replacement goods, and
  • exclude liability for consequential loss

were reasonable within the Unfair Contract Terms Act 1977 (UCTA 1977).

The judgment provides a clear illustration of the court’s approach in assessing UCTA 1977 reasonableness as regards clauses, in a contract for the supply of laminate sheets (which were then used in the fabrication of bonded panels as part of the shopfit for Primark stores), which sought to exclude SGA 1979 terms as to quality, exclude liability where the buyer failed to inspect the goods on delivery and notify defects, limit liability to the cost of replacement goods and exclude liability for consequential loss.

In this case, the judge concluded that the key issue in the present case was that the requirement to inspect and notify, failing which all liability was excluded, was too draconian.

Data protection: Supreme Court grants Google permission to appeal in the ‘Safari’ case

In Vidal-Hall v Google (The Information Commissioner intervening), the Court of Appeal held that misuse of private information should be recognised as a tort for the purposes of service out of the jurisdiction and that, in order to make section 13(2) of the Data Protection Act 1998 (DPA 1998) compatible with EU law, that section had to be disapplied, with the consequence that compensation would be recoverable under DPA 1998, s 13(1) for any damage suffered as a result of a contravention by a data controller of the requirements of DPA 1998.

The court held that this tort was actionable without evidence of pecuniary loss (ie damages could be claimed for emotional distress only).

On 28 July 2015, the Supreme Court granted permission in part for Google to appeal this Court of Appeal decision on three grounds, namely, whether the Court of Appeal was right to:

  • hold that the claimants’ claims for misuse of private information are claims made in tort for the purposes of the rules relating to service out of the jurisdiction
  • hold that DPA 1998, s 13(2) was incompatible with the Data Protection Directive, Directive 95/46/EC, art 23 and
  • disapply DPA 1998, s 13(2) on the grounds that it conflicts with the rights guaranteed by articles 7 and 8 of the EU Charter of Fundamental Rights

No dates have been announced for the hearing but it looks unlikely that it will take place before 2016.

Public procurement: High Court finds manifest errors in procurement exercise

The High Court has found manifest errors in Milton Keynes Council’s tender process for the award of a framework agreement and held that there had been breaches of the duties of transparency and equality in Woods Building Services v Milton Keynes Council.

This case is a reminder of the need for procurement exercises in the public sector to be undertaken with tremendous care.

Obviously, all relevant statutory requirements must be followed, and the procuring body must ensure the duties of transparency and equality are complied with and that there are no errors in the process.

However, the case also highlights the need for there to be sufficiently detailed, contemporaneous and written records of the process should be kept by the body undertaking the tender process.

So that’ll do for now but don’t forget, by entering your name and email address in the box on the right hand side of this page you will receive our larger monthly round-up PDF for free along with other exclusive content courtesy of our new Comet newsletter.

And if you are off on your holidays, bonnes vacances!

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