Litigation news

08/07/2010 - FSA takes two bites out of unauthorised deposit-takers

The High Court has recently reinforced the FSA's right to recoup losses suffered by investors in unauthorised firms, in addition to requiring such firms to disgorge all profits.
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07/07/2010 - Derivative Actions under Companies Act 2006

The High Court has decided when it would be appropriate for a minority shareholder to continue a claim against directors of a company in accordance with sections 261 and 263 Companies Act 2006.
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05/07/2010 - Two recent appeals confirm that Part 36 CPR is a self- contained code which does not import all of the general rules of contract law

In two appeals heard together the court was asked to consider the interpretation and effect of CPR Part 36.
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15/06/2010 - Set-offs: what is a close enough connection?

Simon Carves Limited ("Carves"), was the main contractor for the building of a bioethanol plant in Teesside. For the construction of the plant it needed to buy pressure vessels for the plant and to have storage tanks installed on the site. There was no connection between these items (other than they were required for the plant), and accordingly the fact that the supply contract was awarded to one party did not mean that the contract for the installation would also be awarded to the same party. As it turned out Carves did contract with one party Geldof Metaalconstructie NV ("Geldof ") for both contracts.
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11/05/2010 - Exclusion clause for losses caused by IT company in its standard terms proves unreasonable

An IT company which specialised in providing front and back office booking systems failed to provide an inner London 4 star hotel with a product which was fit for purpose.
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20/04/2010 - Freezing Orders over the Assets of Third Parties

Yukos Capital S.a.r.l ("Yukos") obtained a freezing injunction against OJSC Rosneft Oil Co ("Rosneft") and 11 other Defendants. The Sixth to Twelfth Defendants (referred to as the "RT Defendants") sought an order discharging the injunction against them on the basis that the Claimant had no cause of action against them and because they held assets as neither the nominee nor trustee of Rosneft, the primary Defendant.
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26/03/2010 - Surveyor negligent despite inflated purchase price

The Court has recently provided a reminder that surveyors will be held to account for negligence, even where the purchaser claimant has arguably supplied misleading information.
The claimant purchased a flat in a residential block as a buy-to-let investment. The claimant stated in his application for finance that the purchase price/estimated value of the flat was £353,000, and applied for finance of 80% of that sum.
The defendant surveyor (who worked for Colley's, then part of Halifax plc) provided the lender with a valuation report assessing the market value of the flat as being the price he thought the claimant was going to pay for it (£353,000) and estimated the expected rental at £2,000 per month.
The purchase price, although technically £353,000, was subject to a 'gifted deposit' from the vendor to the claimant, which returned to the claimant 15% of the purchase price initially and a further 10% deferred for a year.
After completion the claimant was only able to achieve a rental of around half that estimated by Colley's, and brought proceedings claiming that the flat was worth only £250,000 at the time it was purchased (although the claimant subsequently sold it for £270,000). The claimant alleged that the valuation report negligently overstated both the value of the flat and the expected rental returns.
Despite Colley's contentions to the contrary, the Court held that:

1. Colley's did owe a duty of care to the claimant, and that the duty had not been excluded by a disclaimer in the mortgage application form;
2. the claimant was not precluded from bringing his claim as a result of the representations as to the price of the flat made to the mortgage lender;


3. the claimant did in fact rely upon the valuation (both of the purchase value and the rental value); and


4. the valuation was sufficiently above the allowable margin for error that it was negligently made.

03/03/2010 - The consequences of a party seeking to rely on documents in an action when they have been obtained by irregular means

The most recent judgment given in connection with divorce proceedings which commenced in December 2008 and which were quickly followed by injunctive proceedings brought a husband against the wife's brothers and companies after they obtained documents and information from the husband's computers addresses the ramifications for the wife who received the documents.
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26/02/2010 - Claim for consequential loss allowed in claim for negligence against surveying firm

The defendant was a licensed conveyancing firm which had acted for the Claimant in a property transaction. Joyce had purchased a property that had been advertised for sale with a buyer's option to purchase some additional land to the rear of the property if the vendor of the property was unable to obtain planning permission for the construction of a dwelling house on the additional land.
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16/02/2010 - Court of Appeal majority preserves sanctity of without prejudice communications in a settlement

The Court of Appeal has ruled that "without prejudice" communications should not be admissible as evidence at a trial as evidence of the interpretation of a term in a settlement agreement. They indicated that when balancing the conflicting principles of without prejudice communications remaining inadmissible and ensuring the best and most useful evidence is before the court, it is preferable to preserve the privilege attached to without prejudice communications in order to encourage parties to have confidence in their ability to freely negotiate settlements.
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08/02/2010 - Managing Director personally liable for preferential payment

The claimant was a property company (Starglade) which claimed that the first defendant (N) was liable for dishonestly assisting in a breach of trust and sought, on the basis of knowing receipt, payment of money Nash had paid himself. Starglade had sold land to a development company (L). Nash was the managing director of L. Proceedings were later commenced by L against a third party and L sought from Starglade, for use in the proceedings, the assignment of a report previously obtained by Starglade. The third defendant (Mr Twining) was a partner at the second defendant law firm which advised L.
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04/02/2010 - Freezing orders and the restriction on the disclosure of information

The claimant bank made a successful application to release the restrictions on the disclosure of information in the first defendant's ("Mr Ablyazov") affidavit and exhibit, which had been provided pursuant to a freezing order.
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05/01/2010 - Users of Wikipedia can be traced by third parties

The Applicants (a mother and young child) applied to the Court for an order requiring the Respondent to disclose the IP address of a registered user of the Wikipedia website (a "Norwich Pharmacal" order). The user in question had made an amendment to an article available on Wikipedia.
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