REUTERS | David Mdzinarishvili
October 8, 2014

Penalties: a genuine re-estimate of loss?

As a solicitor in private practice, I am routinely subjected to training on anti-money laundering rules. These courses place you in hypothetical scenarios and offer you multiple choice questions, such as should you (a) run screaming to the Police and national press; (b) ignore your suspicions and pocket the fees; or (c) have a quiet chat with the firm’s MLRO? The recent case of Unaoil Ltd v Leighton Offshore Pte Ltd not only presents a fascinating “real-life” version of one of these training scenarios, but also raises a new line of attack for parties challenging liquidated damages (LDs).  Continue reading →

REUTERS | Stefan Wermuth
October 8, 2014

TCC decides unreasonable refusal to mediate but for other reasons imposes no costs sanction

In Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4i) Ltd, BAE successfully argued that its interpretation of a licensing agreement was correct. Northrop then argued that BAE’s costs should be reduced by 50% because BAE had unreasonably refused to mediate. While Ramsey J found that BAE had unreasonably refused to mediate, for other reasons, the court awarded BAE its costs on the standard basis without any reduction.

This decision is important because:

  • It re-emphasises the danger of refusing to mediate.
  • It directs parties (again) to the guidance in the ADR Handbook.
  • It says that when considering the “prospects of success” of an ADR process, the court should not just look at the positions taken by the parties.

Continue reading →

REUTERS | Sean Yong
October 8, 2014

Mitigation and the reasonableness of a settlement agreement

In Rentokil Initial 1927 plc v Goodman Derrick LLP, the court revisited the issue of mitigation which I commented on in August. This time the context was somewhat different as the point arose in relation to a solicitor’s negligence claim where the claimant had resolved remedial arbitration proceedings that it had launched, seeking to recoup its losses due to alleged negligence in drafting a sale agreement. Indeed, it spent some £600,000 on costs in the arbitration, which it claimed as damages. Notwithstanding this expenditure, the arbitration was compromised, apparently as a commercial deal without regard to the merits of either party’s case. Continue reading →

REUTERS | Aly Song
October 7, 2014

Scope of jurisdiction: Court of Appeal decides expert’s determination invalid

The RICS recently undertook a rigorous review of its adjudication panel, with some members leaving and a handful of high quality new members joining. On speaking to one of those new members, he commented that “this adjudication lark isn’t as easy as it looks, is it?”. Quite.

One of the most difficult areas concerns jurisdiction, not only because it can concern complex issues, but also because the adjudicator has to determine the issue of his jurisdiction quickly so that the parties know whether the adjudication is proceeding and, if it is, the scope of the adjudicator’s jurisdiction. Continue reading →

REUTERS | Andrew Winning
September 30, 2014

September 2014 digest: autumn leaves and misty mornings

Dylan Thomas, Collected Poems:

“And I rose in rainy autumn, and walked abroad in a shower of all my days…”

September has been a warmer and drier month than on average, but autumn is now in full swing and the leaves are starting to turn and fall. That means the Michaelmas court term is about to start and we are only 12 weeks away from Christmas! Continue reading →

REUTERS | Beawiharta
September 30, 2014

Experts take it on the chin as Akenhead J’s “gloves are off” again

This post is yet another in my (not so) occasional series about expert evidence and expert witnesses. It could be called, “Is it time for some experts to throw in the towel?”

Last time I looked at experts, I said that Leggatt J’s judgment in Hirtenstein v Hill Dickinson was one to read if ever you wanted to see how not to be an expert witness. A similar thing could be said about Weatherford Global Products v Hydropath Holdings Ltd and others, where Akenhead J doesn’t pull any punches. Continue reading →

REUTERS | Yuriko Nakao
September 24, 2014

International arbitration: East or West of Java?

Regular users of international arbitration know that choice of seat is important, but what factors influence parties for or against a particular venue? Are certain venues considered better or worse than others and are there any emerging trends for regional choices? Earlier this year, Berwin Leighton Paisner’s fourth annual arbitration survey asked arbitration users these questions.

Continue reading →

REUTERS | Paulo Whitaker
September 23, 2014

Decision day negotiations – it’s never too late to settle

Summer is swiftly drawing to a close, but while many of us have been on our holidays, the construction industry appears to have been running at full-bore throughout the summer. Although there was a minor stagnation in July, there is still a significantly greater volume of work than compared to five years ago, and labour shortages are clearly a problem. For example, I was speaking to a sub-contractor recently who is struggling to get labour and has seen his labour rates increase by over 15% in the last year, and yet he is still winning work.

Continue reading →

REUTERS | John Kolesidis
September 19, 2014

The curious case of CPR 7.7

With the advent of online legal resources and, in particular, the online availability of legal textbooks such as Chitty on Contracts, many lawyers do away with purchasing hard copy practitioner’s texts. I always think that is a bit of a shame. I am surely not the only one who has been scrabbling around Chambers the night before a hearing for the most recent update to Keating on Construction Contracts, which a fellow barrister has taken from your room without leaving a note. There is nothing quite like that kind of unnecessary pressure to focus the mind.

One of my annual conundrums is whether to buy both volumes of the White Book; or just one volume; or not to buy at all, and instead rely on the online version. This year I opted for using the online edition, but I ended up having to buy the book anyway on the way to court, with only one month to go before the 2014 version came out. Now in possession of a gleaming but redundant tome, I figured I might as well get my money’s worth and delve into some of the more obscure provisions of the CPR, something that is less easily done online, perhaps because computer screens do not accidentally fall open on a particular page. Continue reading →

REUTERS | Eduardo Munoz
September 16, 2014

NEC, notices of dissatisfaction and the Arbitration Act 1996

Regular users of the NEC3 ECC will be familiar with its dispute resolution provisions set out in Options W1 and W2, used depending on whether the contract is a “construction contract” and the Construction Act 1996 applies (W2), or it isn’t and it doesn’t (W1). Both Options provide for disputes to be referred to adjudication and include similar prescriptive time limits for when things have to be done by. They also both provide for the giving of a notice of dissatisfaction in the event that one party is unhappy with the adjudicator’s decision.

Since none of this is new stuff, I was rather surprised to see the arguments advanced in Fermanagh District Council v Gibson (Banbridge) Ltd, which reached the Court of Appeal in Northern Ireland. Continue reading →