Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
Find up-to-date guidance on points of law and then easily pull up sources to support your advice with Lexis PSL
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
Simon Mills of Five Paper examines BHL v Leumi ABL and suggests the case serves as an important example of the extent to which courts appear willing to scrutinise the exercise of discretionary powers in a commercial context.
BHL v Leumi ABL Ltd  EWHC 1871 (QB),  All ER (D) 04 (Aug)
The Mercantile Court allowed BHL’s claim that, on the true construction of a receivables finance agreement (RFA) between the defendant company, Leumi ABL Ltd (Leumi) and Cobra Beer Ltd (Cobra), which subsequently went into administration, Leumi had not been entitled to charge a collection fee of 15% on receivables on Cobra Beer’s sales ledger, in circumstances where BHL had agreed to indemnify the defendant in respect of sums due under the RFA, and had paid the defendant £950,000 in response to its demands for outstanding collect-out fees.
The claim concerned the collection charges of Leumi claimed under a RFA entered into with Cobra. On 29 May 2009 Cobra was restructured and, as part of the restructuring, BHL agreed to indemnify Leumi in respect of any sums due under the RFA.
On 3 June 2009 Leumi commenced a collect-out of the Cobra receivables, which were then worth about £10.5m. Leumi eventually collected about £8.1m. The collect-out was relatively swift and by late January 2010 Leumi had concluded that it had already conducted a reasonable collection process and it turned its attention to BHL for payment under the indemnity.
In order to effect the collections, Leumi had hired two of Cobra’s principal credit controllers, and it engaged the services of a third-party collection company and those of its solicitors, Hammonds (now Squire Patton Boggs (UK) Ltd). All the costs and fees incurred in engaging these third parties were charged to Cobra’s current account. Leumi also increased the discount charge by 2% to cover its anticipated operating expenses in administering and collecting the receivables. Notwithstanding
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
0330 161 1234