Any decision as to whether it is financially justifiable to pursue or defend Court proceedings requires careful analysis of several factors. Two of the more important ones are the chances of winning, and the costs involved in getting to trial.
The break clause, a relatively rare item ten or so years ago, is now becoming even more significant in these troubled economic times, with many tenants looking to get out of their leases as a way of cutting costs.
Over the past decade businesses have increasingly used technology to conduct transactions. Email in particular has become an everyday part of corporate life. A recent amendment to Part 31 of the Civil Procedure Rules attempts to address the way in which parties to court proceedings disclose electronic documents with the intent of minimising the time and costs involved in the process. A new Practice Direction has been introduced together with an Electronic Documents Questionnaire.
Admissibility of without prejudice negotiations as an aid to construction
The without prejudice rule protects statements made in the course of without prejudice negotiations from being admissible in evidence. The rule applies to all negotiations genuinely aimed at settlement whether oral or in writing.
In his recent report on costs Lord Justice Jackson highlighted that alternative dispute resolution (“ADR”) is under used. Whilst he did not conclude that ADR should be mandatory he did consider that more could be done to encourage mediation. He emphasised that the court can and should make orders requiring parties to provide an explanation if they decline to mediate and to make costs orders which penalise parties who have unreasonably refused to mediate. Lord Justice Jackson was of the view that much of the question of whether mediation is appropriate will come down to the judgment of experienced practitioners and the court.
The concept behind Part 36 of the Civil Procedure Rules will be familiar to most legal advisers. However, recent case law suggests that interpretation of the rule is still causing difficulties for practitioners and mistakes are still being made in drafting and dealing with offers. A number of amendments have been made to the rule in the last few years and it is vital that those making offers understand the requirements of making and withdrawing offers.
Is it a penalty? Is it a liquidated damages clause? No, it’s “commercially justifiable”
A liquidated damages clause is a provision often included in an agreement to ensure that the contracting parties can be adequately compensated in the event of termination of the contract. Such clauses are generally enforceable, provided they are based on a genuine pre-estimate of loss and are not intended purely to deter a party from breaching the contract.
In 2008 the Court of Appeal case of Foxtons Limited v Pelkey Bicknell & Anr found that to be entitled to commission estate agents must show that they introduced the purchaser to the purchase and not merely to the property.
A retention of title clause (“ROT”), is a provision often included in a supply contract which seeks to ensure that title in the goods does not pass from the supplier to the purchaser until payment has been received. An “all monies” ROT goes further than that since it seeks to retain title in the goods until all monies for the goods in question plus any other monies owed to the supplier are paid, thereby increasing the protection afforded to suppliers. However, it is important to ensure that the ROT corresponds with the general purpose of the contract and the nature of the business being carried out.