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In association with Iain Larkins from Radius Law, we discuss:
Recovery of losses
Employer not liable for employee’s deliberate data breach
No liability for self-employed medical practitioner
Price monitoring tools
Corporate & Commercial
When is control too remote?
A party to litigation has a duty to disclose documents in its control but are documents held by a subsidiary company, in the parent’s control? A recent case has clarified control will not be implied simply because there is a parent-subsidiary relationship, but a parent company will be deemed to have control over a subsidiary’s documents where there is an existing arrangement or understanding (whether or not that’s legally enforceable) which, in practice, provides the parent with a right of access to the subsidiary’s documents.
See News Analysis: When does a parent company have ‘control’ of subsidiary’s documents? (Pipia v BGEO Group Limited)
A recent High Court case saw a direct challenge to the traditional approach of categorising losses that arise from a breach of contract. This followed several cases in recent years where the judiciary have called for the need to reform this area of law and a 2016 decision where the Court departed from the traditional approach, albeit by reference to specific wording.
The traditional approach established in the Hadley v Baxendale  case categorised recoverable losses as either:
The problem with this distinction is that it does not match the common business understanding of the terms. Most business people are likely to assume that by excluding indirect losses in their contracts, they are excluding anything that is not obviously a direct loss – so, in this example above are likely to assume that they have also excluded the loss of production during the re-build.
We expect to see further attacks on this traditional approach – so recommend that more clarity is added to the types of losses that the contracting parties want to exclude to avoid uncertainty in the future.
See News Analysis: Force majeure and construction of exclusion for indirect or consequential loss or damage (2 Entertain Video v Sony)
See News Analysis: Indirect and consequential loss exclusions—English law holds the line for now
See News Analysis: In brief: 'Consequential loss and special damages' in exclusion clauses (Star Polaris LLC v HHIC-Phil Inc)
Can an invalid deed be enforced as a contract?
The High Court has confirmed that if a deed is held to be invalid (e.g. because it is not signed or sealed in the presence of a witness), it can still be enforced as a contract provided it meets the required formalities of a contract and the transaction does not require a deed (e.g. a land transfer or a power of attorney)
See News Analysis: Guarantees unenforceable as deeds due to improper execution may take effect as simple contracts (Signature Living Hotel Ltd v Sulyok)
A new dominant purpose test for legal advice privilege
A recent court decision has clarified that for a document to have the benefit of legal advice privilege the dominant purpose of the document must be for legal advice. In the judgement the Court gave guidance about multi-addressee emails (from and to both lawyers and non-lawyers):
See News Analysis: Court of Appeal confirms dominant purpose test applies to legal advice privilege (R on the application of Jet2.com Ltd v Civil Aviation Authority (Law Society of England and Wales intervening))
The Supreme Court has overturned the Court of Appeal decision that held Morrisons liable for a deliberate data breach committed by a disgruntled ex-employee (which exposed the personal data of over 100,000 of its employees) and led to Morrisons facing a substantial class action by affected employees. The Supreme Court decided that Morrisons should not be liable for a deliberate breach which ‘did not form part of [the ex-employee’s functions or field of activities…. or an act which he was authorised to do’.
See News Analysis: The Supreme Court allows Morrisons’ appeal in group litigation claim (WM Morrison Supermarkets plc v Various Claimants)
The High Court has, for the first time, considered the application of the EU Trade Secrets Directive which was implemented into UK law in June 2018.
Whilst the Directive largely restates existing UK law, it is generally considered to create a wider scope of what is confidential information. Broadly, it states that information will be confidential if it is secret, has commercial value and has been subject reasonable steps to keep it secret.
The Court in this case said that the Directive provided the ‘best guide’ to determine whether information should be classified as confidential.
The Directive also makes it unlawful for a recipient to use such information if it ‘knew or ought to have known that the trade secret had been obtained directly or indirectly from another person who was using or disclosing the trade secret unlawfully.’
This case involved common circumstances - where former employees established a rival company using customer information belonging to their former employer. The Court had no hesitation in agreeing that the former employees and the new rival company breached their duty of confidence to the former employer.
A few planned changes to employment law were effective from 6th April including:
Meanwhile, due to COVID-19 changes to the off-payroll rules (known as IR35) have been postponed to April 2021 and the obligation for relevant employers to publish their 2019/2020 gender pay gap information has been suspended.
In Barclays Bank plc v Various Claimants, the Supreme Court, has held that Barclays was not liable for the acts of a self-employed medical practitioner who was alleged to have committed sexual assaults while carrying out medical assessments of the bank's prospective employees.
He was in business on his own account and worked for a portfolio of clients, one of which was Barclays. The Court held that the relationship was not akin to employment so could not give rise to liability to the bank.
See LNB News: Barclays Bank plc v Various Claimants  UKSC 13
National minimum wage guidance
On the 6 April, the Government made changes to the enforcement of breaches to National Minimum Wage (‘NMW’), including:
New guidance concerning the National Minimum Wage (NMW) regulations has been published on the Government website.
Dominance and excessive pricing.
The Court of Appeal agreeing with the earlier Competition Appeal Tribunal's (CAT) has annulled the Competition & Markets Authority (‘CMA’) decision that Pfizer and Flynn had abused their dominant market position by charging excessive prices for their anti-epilepsy drugs
The CMA was criticised for taking an over-simplistic analysis by deciding that prices were excessive based on an abstract analysis, which compared the price with a notional benchmark of ‘cost plus 6%’, but ignored evidence about the pricing of similar products. The matter has been referred back to the CMA for reconsideration.
The CMA has issued the music equipment suppliers Roland and Korg with a charge sheet alleging unlawful price fixing.
What’s particularly noteworthy is that Roland and Korg utilised commonly used software tools to monitor the prices which retailers sell their products. The CMA has alleged that the use of sophisticated ‘all-seeing’ software has the effect of scaring retailers into complying with suppliers pricing rules in the first place and therefore undermining retail competition.
This investigation follows the CMA’s investigation into Casio and subsequent fine of £3.7 million for engaging price fixing activities which was also exacerbated by its use of online price monitoring software.
Nothing in this Bulletin, or on the associated website, is legal advice. We have taken all reasonable care in the preparation of this Bulletin, but neither we nor the individual authors accept liability for any loss or damage (other than for liability that cannot be excluded at law).
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Louisa leads marketing for the in-house legal community at LexisNexis. She joined the dedicated in-house team at LexisNexis four years ago and has a passion for driving and facilitating initiatives which are customer-focused at their heart. Her vision
is to support in-house counsel succeed in their fast-evolving role based on deep insight, data analysis and best practice gathered across the in-house community.
Prior to her in-house focused role, Louisa led the marketing for the bar and mid-market private practice sectors as well as product marketing lead for LexisPSL - LexisNexis' cloud based, practical guidance and legal research software solution.
She brings 20 years' marketing experience both client and agency side, specialising in B2B marketing in the Legal, TMT (Telco, Media and Technology) and Financial Services industries. In both South Africa, Europe and the UK.
Louisa is also an active member on the LexisNexis Gender Equality Matters (GEM) steering committee and is involved with the Families at LexisNexis Group which brings together, supports and lobbies for change those with an interest in balancing the challenges
of work and family.
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