The European Commission proposes amending the Brussels Regulation to reduce the scope for avoiding arbitration by commencing court proceedings in breach of an arbitration agreement. This is a welcome boost to those involved with international contracts. The proposals would reinstate one of arbitration’s main advantages: access to speedy justice outside of a judicial system.
The liability clause is arguably the most important clause in a contract being notoriously the subject of dispute and yet it is the one clause that is usually drafted inadequately.
The judgment in Markerstudy Insurance Company Ltd v Endsleigh Insurance Services Ltd has served as a sharp reminder to contract drafters of the need for absolute clarity and precision when it comes to excluding liability for certain heads of loss. Continue reading
We regularly act for clients negotiating professional appointments. Historically, in the domestic market, professional consultants had not sought to limit liability for losses caused by their negligence or breach. However, over the past few years, requests for limits on liability have become increasingly common.
In Roberts v Frohlich, Norris J considered whether the directors of a property development company, Onslow Ditchling Limited (ODL), had acted improperly prior to ODL’s liquidation.
ODL was incorporated as a special purpose vehicle to buy and develop a single site at Ditchling that had planning permission for 30 industrial units. The development was to be financed entirely with borrowed money and, ultimately, all the units were to be sold freehold. Both directors (Mr Frohlich and Mr Spanner) were experienced professionals and both had extensive experience in property development companies. Continue reading
The Court of Appeal’s recent decision in Robinson v Jones considered the extent of a contractor’s duty of care in tort not to cause economic loss. Specifically, it considered the extent, if any, to which the making of a contract in itself gives rise to an assumption of responsibility (in the Hedley Byrne v Heller sense) that justifies imposing a tortious liability for economic loss.
In short, the court decided that a “simple” building contract does not in itself give rise to the requisite assumption of liability, but that the same does not apply to professional appointments. However, the court did not express a view as to which side of the line design and build contracts fall, and I thought this was one of the most interesting aspects of this case. Continue reading
In my December post I asked why an insolvent party would commence an adjudication when, even if it was successful and tried to enforce the adjudicator’s decision, the court would invariably grant a stay of execution. So, why bother one may ask?
The courts recognise that if money is paid over to an insolvent party, the paying party is unlikely to recover that money if it successfully reverses the position in future proceedings. This is why the court may grant summary judgment in favour of the insolvent party but makes it subject to a stay of execution.
Recently, I came across the situation where an insolvent party tried to argue that an adjudicator’s decision was “final and binding” and that monies should be paid over to it, the successful party. Continue reading
As I was recently sailing beneath a deep blue sky on a junk in the majestic Hong Kong Harbour, gin and tonic in hand, you may be surprised that I had the law on my mind – specifically, Azimut-Benetti v Healey. A dispute between the parties required the High Court to revisit the classic dichotomy between liquidated damages (LDs) and penalties. The fact that the case involved a contract to buy a rather expensive yacht may make this picture a little more understandable!
A client recently raised this question in the context of a project using the NEC3 ECC. It throws up a number of issues including whether the bank holiday:
To the surprise of the man on the street, relatively low value disputes are difficult to litigate cost effectively. Often the value of the claim is soon exceeded by each party’s legal costs. At the end, when one side comes second, it is presented with a very large bill. Mediation offers the parties a way to avoid this. Continue reading
The parties to civil engineering and construction contracts, particularly for energy projects, manufacturing facilities, process plants, waste processing and similar projects, increasingly try to fix a “final frontier” for their exposure to claims, using a limit of liability clause.
Last summer’s GB Gas Holdings (referred to as Centrica) v Accenture reminds us about how limits of liability will be interpreted and, as an employer or contractor, it is important you go some way to understand the effect of your limitation of liability provision. Continue reading
