Flying Solo forum: commercial law update

Flying Solo forum: commercial law update

parachuteOn the 20th of October LexisNexis, together with Radius Law and C&I, hosted the first Flying Solo forum for sole in-house counsel and in-house lawyers in small legal teams. The session was chaired by Sophie Gould and consisted of a commercial law update followed by peer to peer sharing of insight. 

Led by Iain Larkins, the commercial law update provided an overview of the top 5 legislative changes and top 5 contract case law changes over the last 12 months. Iain explored the practical impact of the changes and discussed how in-house lawyers should be preparing and responding.

Flying Solo 2017 events: Register your interest

Key legislative changes

  1. Small Business Enterprise and Employment Act 2016
    The SBEEA 2015, which received Royal Assent on 26 March 2015, is an incredibly wide-ranging act which affects a miscellany of topics including education, employment and access to finance as well as company law. The company law reforms introduced by the Act include:

    • requirement for companies and LLPs to maintain a PSC register
    • amendment of s170(5) CA 2006 to provide that director’s duties apply to shadow directors
    • abolition of bearer shares
    • duty to publish report on payment practices (expected April 2017)
  2. Insurance Act 2015
    12 August 2016, marked the day that the Insurance Act 2015 came into force. This is the most significant reform of UK insurance law in over 100 years and impacts all business insurance contracts, but not consumer insurance. In particular:

    • the Act introduces a new duty of ‘fair presentation’. This places a more onerous duty on the insured to provide information that they actually know and to search for information that they ought to know
    • In addition, the disclosure must also be made in a manner which is reasonably clear and accessible so it is not possible simply ‘dump data’. Prior to the new law a material non-disclosure would allow an insurer to avoid the entire contract. Now, for the insurer to avoid the contract completely it will have to show that the non-disclosure was deliberate or reckless.
    • An insurer cannot avoid a claim simply because of a breach of a term in an insurance policy unless that breach relates to the loss.
  3. Modern Slavery
    Businesses with a global turnover of £36m are now required to produce a slavery and human trafficking statement within 6 months of their year-end. For guidance on how to comply with the Modern Slavery Act see our Advisory Board paper on Effective Compliance and Supply Chain Management.
  4. Consumer Rights Act 2015
    The CRA 2015 was implemented on the 1st October 2015 and introduced raft of new consumer protection legislation to overhaul and rationalise consumer law in the UK. The key changes include:

    • an extension of the period for customers to change their minds from 7 days to 14 days
    • a reduction of the period for refunding customers from 30 days to 14 days
    • a maximum 30-day window for delivery unless the customer has expressly agreed otherwise
  5. Section 52 of the Copyright, Designs and Patents Act 1988
    Section 52 of the Copyright, Designs and Patents Act 1988 was repealed on the 26 July 2016, this reform will give industrially manufactured artistic works the same length of protection as other artistic works.

Key contract law changes

  1. Interpretation of contracts
    There have been a number of cases this year which show that the courts are rarely willing to interpret or imply terms into a contract

      • Arnold v Britton [2015]: "the parties have control over the language they use in a contract . . . it is not the function of a court when interpreting an agreement to relieve a party from the consequences of his imprudence or poor advice. Accordingly, when interpreting a contract a judge should avoid re-writing it in an attempt to assist an unwise party or to penalise an astute party"
      • Spencer v BNP Paribas Securities Services [2015]: the court stated that the test for a term to be implied into a contract is that it must be either so obvious as to go without saying or only be implied if, without the term, the contract would lack commercial or practical coherence"

    These cases suggest that parties seeking to imply terms into a contract will face an uphill struggle. Factors such as fairness and subjective intentions of the parties are unlikely to help.

  2. Penalty Charges
    In the case of Cavendish Square Holding BV v Talal El Makdessi [2015] the court held that genuine estimate of loss is not the only factor that you need to look at when challenging a penalty provision, you also need to consider whether the fine is extravagant or unconscionable - "the real question when a contractual provision is challenged as a penalty is whether it is penal, not whether it is a preestimate of loss… The fact that the clause is not a pre-estimate of loss does not therefore, at any rate without more, mean that it is penal."
  3. Termination rights
    It is common practice in commercial contracts for the terms to state that when one party is in default, the innocent party must notify the defaulting party of the breach and allow a period of, typically, 30 days to rectify the breach before the innocent party is entitled to terminate.Two recent cases: C & S Associates UK v Enterprise Insurance Company [2015] and Vinergy International v Richmond Merchantile [2016] however have flagged that if the defaulting party is in repudiatory breach of a contract then the innocent party will have a common law right to terminate without notice even where the contract requires a 30-day remedy period unless the contract specifically makes the common law right subject to the same remedy period.
  4. Agreements to agree
    Generally, agreements to agree are not enforceable however, in the case of Hughes v Pendragon Sabre [2016] the Court of Appeal decided that the agreement between the parties was enforceable and made it explicit that the price does not need to be agreed - "by no stretch of the imagination was this simply an agreement to agree, even though it was 'Subject to Price + Spec'".
  5. Misrepresentation
    In the case of Salt v Stratstone [2015] the Court of Appeal clarified that rescission should (still) be the normal remedy for misrepresentation and the claimant should be able to recover the purchase price

Group Discussion and networking:

The delegates had the opportunity to meet their peers, share insights and discuss obstacles that they face in their work environment. They expressed an interest in replicating a similar format session in the future and shared a number of topics that they would be keen to explore.

We are pleased to confirm that we will be hosting more sessions in 2017 to support the in-house community. To express your interest in the upcoming 2017 events please email Sophie Gould at

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About the author:

Sophie is Head of Learning & Development at F-LEX Legal - an award winning legal tech startup helping law firms and organisations manage a flexible work force and supporting lawyers to make smarter life/work choices. 

As part of her portfolio career Sophie runs various learning and development and networking forums for in-house lawyers and mentors junior lawyers.  These include Flying Solo for small and solo legal teams and Aspire for junior in-house lawyers which she runs for LexisNexis UK.  She also works with schools and organisations to promote social mobility within the legal profession, working with The Social Mobility Business Partnership and Aspiring Solicitors. 

She trained as a lawyer in the City and worked as an in-house lawyer for 10 years including as Head of Legal for Virgin Radio and Ginger Media Group.  

Outside of work she is happily married with three sons and enjoys morning walks along the beach with her two dogs.