Commercial news vlog - September 2020: Schrems II; COVID-19: statutory payments, holiday, sick pay and self-isolation; Marriott class-action damages suit

Corporate & Commercial

Invalid notice of a claim

In most business sale agreements, the sellers will indemnify the buyers for claims that arise from pre-sale activities, provided the buyers give the sellers notice of those claims.  The notification requirements usually require the sellers to be provided with reasonable details of the matter, the nature of the claim and the amount claimed. As the buyers in a recent case found, it is better to be cautious and provide full details.  In this case the buyers claim failed because their formal notice of the claim (issued shortly before the deadline) did not provide sufficient detail, particularly about why the company may be liable.  The buyers will, perhaps justifiably, be sore about this decision as they had provided information about the claim some time before the formal notice together with regular updates.

News analysis: Contracts–construction (Dodika Ltd and others v United Luck Group Holdings Ltd)

Reflective loss

The Supreme Court has overturned 40 years’ of case law and ruled that the reflective loss principle does not restrict claims by unsecured creditors. Reflective loss describes a situation where a company has a claim against a third party and a creditor also has a claim against the same third party, that’s reflective of the loss suffered by the company. In this case, a company director had defrauded the company leaving it with no money to pay the creditor.  The reflective loss principle had prohibited creditor’s claims in these circumstances and only allowed the company to pursue the claim. This rule has now been overturned.

Practice Note: Reflective loss

Practice Note: Reflective loss—key and illustrative decisions

Data security

US Privacy Shield struck down

The Safe Harbor regime that allowed EU companies to lawfully transfer personal data to subscribing US companies, was invalidated in late 2015.  It was replaced in 2016 with the EU-US Privacy Shield but that has now also been struck down by the European Court of Justice –