Commercial news vlog - March 2021

Commercial news vlog - March 2021

 



 

Corporate & Commercial 

 

Battle of the forms

If two business parties agree a deal with each referring to the deal being on their standard terms – whose terms will be applicable?  This is known as the ‘battle of the forms’.  Usually, it is the ‘last shot’ fired that wins (i.e. the party that supplied its standard terms immediately before the goods or services were provided). A recent Court decision1, however, held that the ‘first shot’ fired won.  In this case the buyer and seller had agreed deals in 2015 and 2016 with both parties referring to their standard terms but the buyer had overlooked that, some years earlier, in 2011 it had signed the seller’s ‘customer file’ which referenced its standard terms and included a statement that no other terms would apply unless agreed in writing by both parties.   

See Practice Note : Contract interpretation—battle of the forms—on whose terms have parties contracted?

See News Analysis : ‘Battle of the forms’ and jurisdiction clauses (TRW v Panasonic)

 

Parent company liability

Parent companies are generally protected from claims against their subsidiaries, but there are exceptions to this general rule.  A recent Supreme Court2 decision in the case of Okpabi v Royal Dutch Shell has lowered the threshold for when a parent company may be attacked and be liable for the negligence of its subsidiary. There is no longer the need to analyse the case by reference to a threefold test that had previously been required3; instead the Courts should simply consider the extent that the parent has taken over, intervened in, controlled, supervised or advised the management of the operations of the subsidiary.  Requirements to comply with parent company policies may be enough to make the parent company liable.  

See Practice Note: Separate legal personality and the corporate veil

See News Analysis : Establishing jurisdiction for claims in tort—when is a parent company liable for its subsidiary? (Okpabi v Royal Dutch Shell)

 

Business interruption insurance

On 15 January, the Supreme Court ruled that insurers affected by the litigation had been wrong to refuse to pay business interruption claims that arose from the COVID-19 pandemic. This means that many thousands of policyholders could have their business interruption losses paid.  Inevitably there will be ongoing litigation as the Supreme Court’s decision is only binding on eight insurers and will be dependent on each specific policy wording and subject to qualified terms.  Nevertheless, the judgement will be helpful to the other cases. The Financial Conduct Authority that brought the claim against the insurers has provided detailed guidance on its website.

See Practice Note : Coronavirus (COVID-19)—FCA non-damage business interruption insurance test case

See News Analysis: Supreme Court gives landmark judgment in coronavirus (COVID-19) business interruption test case (Financial Conduct Authority v Arch Insurance)

 

Panel management of law firms – 24th March 2021

We have teamed up with LexisNexis, F-Lex and Alacrity to bring a virtual round-table discussion about how to build stronger relationships with law firms.  To join this free event, please click here.

 

Data protection

 

UK data adequacy

At the eleventh-hour in December the EU agreed to a four month (extendable to six-months) interim solution in the EU-UK Trade and Cooperation Agreement to continue to allow the free flow of personal data from the EEAEU to the UK.  The interim solution was accompanied by a declaration that the European Commission would look into issuing favourable adequacy decisions to allow the longer-term flow of personal data from the EEA to UK. There have been some doubts about the UK obtaining adequacy decisions, primarily because of the UK’s surveillance regime

In February 2021 the Commission launched the procedure for the adoption of two adequacy decisions for transfers of personal data to the UK under the General Data Protection Regulation, Regulation (EU) 2016/679  and under Directive 2016/680/EU, the Law Enforcement Directive​. Next steps include the Commission obtaining a non-binding opinion of the European Data Protection Board and, after taking that into account, requesting approval from Member States' representatives in the so-called 'comitology procedure'. Following that, the Commission may adopt the final adequacy decisions for the UK.

Even if adequacy decisions are granted there may be legal challenges similar to the successful challenges that have already been made concerning EU-US personal data transfers. Businesses that are reliant on the flow of personal data between the EEA and UK should keep a close eye on the situation and consider what contingency plans are appropriate.

See Practice Note: Brexit—implications for data protectionin particular the section on Post-implementation period: International transfers)

See : UK data protection regime meets EU standards according to draft adequacy decisions

 

Advertising & Marketing

 

ICO’s adtech investigation resumes 

The Information Commissioner’s Office (ICO) has announced that it is resuming its investigation into the adtech industry, which had been paused in May 2020 due to the global pandemic. The investigation focuses on concerns with real-time bidding, which enables the buying and selling of online advertising inventory in ‘the blink of an eye’. The ICO will also be reviewing the role of data brokers in the adtech ecosystem, following its data broking investigation into offline direct marketing services and related enforcement action for Experian in October 2020.

In its update report into adtech and real-time bidding, published in June 2019, the ICO identified a number of risks that real-time bidding poses to information rights. At the time the report was published, the ICO considered that the various industry initiatives in their then-current state did not sufficiently address the ICO’s concerns.

See Practice Note : Adtech and programmatic advertising

 

Online green claims may be misleading consumers.

The UK Competition and Markets Authority (CMA) co-ordinated a global review of websites, conducted under the umbrella of the International Consumer Protection Enforcement Network (ICPEN), that found that 40% of green claims made online could be misleading consumers. At the same time, the European Commission published the results of its own sweep, which showed similar trends:

  • in over half of the cases, the trader did not provide sufficient information for consumers to judge the claim's accuracy
  • in 37% of cases, the claim included vague and general statements such as ‘conscious’, ‘eco-friendly’ and ‘sustainable’, and
  • in 59% of cases, the trader had not provided easily accessible evidence to support its claim

This is an early warning about the importance of ensuring that environmental claims do not mislead consumers and are supported by evidence. The CMA has stated that the sweep’s results will be used to inform the CMA’s ongoing investigation into greenwashing and that if the CMA finds evidence that businesses are misleading UK consumers, it will take appropriate action.

See Practice Notes : Environmental claims in advertising and Advertising law and regulation

 

Employment

 

Uber drivers are ‘workers’ 

The Supreme Court in a landmark decision has confirmed that Uber Drivers are ‘workers’, not self-employed contractors. They are entitled to holiday pay and national minimum wage.

This decision will have profound consequences for other businesses that may be wrongly classifying workers as self-employed personnel.

There were five key factors that were relevant to its conclusion of ‘worker’ status in this case:

  1. Uber dictates the rate of pay by setting the fare calculated by the app;
  2. Uber imposes the contractual terms on which the drivers perform their services;
  3. Uber restricts drivers once they are logged into the app about whether or not to accept a request for a ride (by imposing a penalty if too many requests are declined);
  4. Uber exercises significant control over how services are delivered, including the use of a ratings system;
  5. Uber restricts communications between drivers and passengers, preventing drivers from establishing a relationship with customers beyond a single journey.

See News Analysis: Supreme Court confirms that Uber drivers are workers (Uber BV and others v Aslam and others)

 

IR35 reforms

The IR35 reforms delayed from April 2020 (due to the global pandemic) will be implemented on 6th April. The intention of IR35 is to ensure that appropriate income tax and national insurance contributions (‘NICs’) are paid by contractors who provide their services through intermediary companies. The IR35 rules bite where, but for that intermediary company, the individual contractor would be deemed an employee of the client. Medium and large businesses must carry out status determinations to assess whether IR35 applies. If they do the client is responsible tax and NICs deductions.

See Practice Notes: IR35—off-payroll workers , IR35—off-payroll workers—practical considerations for the end client and IR35—off-payroll workers—practical considerations for the fee-payer

 

IR35 training and audit service

We have produced detailed online training to explain IR35 and its requirements – please visit our training hub to access.

We also provide an IR35 and Worker Status Audit service.  Please click here for more information.

 

Gender pay gap reporting delayed

Due to the impact of global pandemic, the Equality and Human Rights Commission has announced that large employers (employers with 250 or more employees) now have until 5 October 2021 to report their gender pay gap information for the 2020/2021 reporting year (which uses a snapshot date of 31 March 2020 and 6 April 2020).  

See Practice Note : Gender pay gap reporting

 

Employees to disclose personal email accounts.

In the recent case of Phones 4U Ltd v EE and others, [2021] EWCA Civ 116, Phones 4 U alleged the mobile network operators’ senior executives had colluded unlawfully using personal email accounts.   The case then centred on whether the executives were required disclose their personal email accounts. The Court can legitimately require a party to proceedings to make requests of third parties by way of making a search for relevant documents (see para [28] of the judgment). If the executives do not cooperate then Phones 4U could apply for disclosure orders directly against the executives.

See Practice Note: Disclosure—standard disclosure and the reasonable search

See News Analysis : Court of Appeal confirms that search of non-parties’ electronic devices for relevant documents is within scope of CPR 31.5 (Phones 4U Ltd v EE Ltd)

 

Mandating vaccinations

With the vaccination programme in full swing, we have included some Q&As here in response to some regular questions that we are being asked.

Can employers mandate staff to be vaccinated?

This is an untested area of law, but we believe mandatory vaccination policies for all staff are likely to lead to discrimination and unfair dismissal claims.  It is worth noting that the Government is not mandating NHS staff to be vaccinated – so most employers will inevitably struggle to justify why it is different for them.  Mandating vaccinations for specific job roles is more likely to be reasonable – for example if staff travel to other countries for work and need vaccinations

Even if an employer does choose to mandate vaccinations, it will then need to require employees to disclose their vaccination status – which will be fraught with data protection challenges and will need a Data Protection Impact Assessment to be completed first.

Can employers require new starters to be vaccinated?

This is less risky than requiring existing staff as there is no risk of unfair dismissal claims, but there may still be discrimination claims.

Can the return of employees be based on who has been vaccinated?

Possibly, but it still has discrimination risks.  It may be indirectly discriminatory against younger employees who have not yet been offered a vaccination and against employees with other protected characteristics (e.g. disability, belief or pregnancy)

The Advisory, Conciliation and Arbitration Service (ACAS) has issued guidance on getting the vaccination for work.

The Information Commissioner’s Office (ICO has also produced useful guidance on the data protection issues: Data protection and coronavirus—advice for organisations: Vaccinations

See Practice Note : Coronavirus (COVID-19)—testing and vaccination issues for employers

 

Improving workplace support for victims of domestic abuse 

An estimated 2.4 million adults in the UK experienced domestic abuse in the year ending March 2019. This has been compounded in 2020 with the impact of increased home working, self-isolation and lockdown.

On 14 January 2021, the Government published its report on improving workplace support for victims of domestic abuse following its review last summer. The report sets out best practices for employers and proposed next steps. These include a recommendation that all organisations should, wherever possible, implement a domestic abuse policy and train 'champions' to recognise signs of abuse as well as other workplace support measures.

The ACAS ‘Working from home during the coronavirus pandemic’ guidance (available on its website) includes a new section on domestic violence and abuse.

See Practice Note : Coronavirus (COVID-19)—managing the workplace

 

Cases, laws, decisions referred to in this Bulletin 

1TRW Ltd v Panasonic Industry Europe GmbH and another company [2021] EWHC 19 (TCC)
2Okpabi v Royal Dutch Shell plc [2021] UKSC 3
3Caparo Industries PLC v Dickman [1990] UKHL 2
4Uber BV and others v Aslam and others [2021] UKSC 5
5Phones 4U Ltd v EE Ltd and Others [2021] EWCA Civ 116

Disclaimer

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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About the author:

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.