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Decision clarifies the court’s limit of discretion in departing from Part 36 cost consequence rules, even if a party behaved dishonestly.

By Oliver Middleton

The Court of Appeal has overturned a decision at first instance in which a claimant accused of dishonesty was punished by way having to pay not only the usual costs for late acceptance of a Part 36 offer, but also the costs preceding the Part 36 offer. In Tuson v Murphy [2018] EWCA Civ 1461, the Court of Appeal found that the judge’s exercise of discretion had been flawed and the usual Part 36 cost consequences were bound to be applied, despite the claimant’s material non-disclosure.

Background

Tuson centred on a personal injury claim in connection with a horse riding accident suffered by the claimant at the defendant’s riding school. The defendant accepted liability, but disputed the quantum of the claim. The defendant made a Part 36 offer which was accepted by the claimant, albeit some 54 days after the expiry of the offer’s “relevant period”.

In such circumstances, the rules regarding Part 36 cost consequences require the defendant to pay the claimant’s costs up to the expiry of the “relevant period” (in this case, 8 October 2015) and the claimant to pay the defendant’s costs from the expiry of the “relevant period” to the date of acceptance (in this case, 1 December 2015). That is unless the court considers such orders to be unjust.

Favourable Supreme Court decision for ISPs finding they do not have to bear costs of complying with blocking orders.

By Oliver Middleton

Historically, internet service providers (ISPs) that have been ordered to block access to websites have had to bear their own costs of compliance on the basis that it was seen as being part of the cost of carrying out their business. That position has now changed due to the Supreme Court decision in Cartier International AG & ors v BT plc & anor [2018] UKSC 28 on 13 June 2018.

The previous rationale for ISPs bearing their costs was that, whilst they are not wrong-doers, they benefit financially from the content on the internet — including content that infringes intellectual property rights. Therefore, it is fair that they should bear costs of ensuring content infringing intellectual property rights is not accessible as part of the general costs of carrying on their business.

New director Lisa Osofsky’s cross-border and corporate experience may lead the SFO in a fresh direction.

By Stuart Alford QC and Clare Nida

The announcement that Lisa Osofsky has been appointed as Director of the UK’s Serious Fraud Office (SFO) likely signals new strategic directions for the agency. For the past six years, the SFO has been led by David Green QC, who stepped down from his position in April. In this blog post, Latham partner and former Head of the Fraud Division at the SFO, Stuart Alford QC, provides five predictions for the SFO’s strategic priorities under Osofsky.

Background

Osofsky previously served as Regional Leader of Investigations for Europe, the Middle East, and Africa (EMEA) at Exiger, the global regulatory and financial crime, risk and compliance company. She has also held posts on the other side of the Atlantic. Her experience includes serving as a US federal prosecutor, as Deputy General Counsel and Ethics Officer at the FBI, as Money Laundering Reporting Officer (MLRO) at Goldman Sachs International, and as a member of the Corporate Investigation Division of Control Risks.

England may become an increasingly attractive forum for follow on damages claims, particularly those involving indirect cartelised product purchases initially acquired outside EEA the in wake of iiyama decisions.

By Oliver E. Browne and Hayley M. Pizzey

Summary

The English Court of Appeal has held iiyama’s two claims against cathode ray tube (CRT) cartelists and liquid crystal display (LCD) cartelists, may proceed to trial. iiyama is involved in the manufacture, distribution, and sale of electronic goods including televisions and computer monitors which originally contained CRTs and now contain LCDs.

This decision has overturned two High Court findings that indirect purchases of cartelised products outside of the European Economic Area (EEA) do not fall within the territorial scope of EU antitrust law.

The final outcome of these two claims will be of great interest to both claimants and defendants.

New “range of factors” test suggests broad use in future civil matters and fairer, more nuanced outcomes.

By Daniel Smith and Alanna Andrew

The High Court has applied the new fact-sensitive “range of factors” test in Harb v Aziz[i] to determine whether a defendant to a civil claim can rely on the claimant’s wrongdoing to defeat the claim. The Supreme Court adopted this new “range of factors” test in the 2016 case of Patel v Mirza[ii], which replaced the “reliance test” identified in Tinsley v Milligan (widely criticised as being too formal). See Latham’s related blog, UK Supreme Court Adopts New “Range of Factors” Approach to Defence of Illegality.

The principles of the illegality defence are that a person should not be able to benefit from their own wrongdoing, and the court should not enforce claims that harm the integrity of the legal system. The defence is potentially far reaching, particularly under the new “range of factors” test, and so its recent application will be of interest to many litigants — especially if there is evidence of a claimant’s wrongdoing.

By Stuart Alford QC, Daniel Smith and Clare Nida

The English Court of Appeal provides further guidance, approving ENRC, on when litigation privilege will not apply to information gathering materials.

The English Court of Appeal (Criminal Division) has ruled that litigation privilege does not apply to a statement an employee makes to his employer’s solicitors as part of their investigation into a death in the workplace. The court’s ruling in R (for and on behalf of the Health and Safety Executive) v Paul Jukes [2018] EWCA Crim 176 is the third judgment on litigation privilege in just nine months.

High Court decision provides practical lessons for companies conducting investigations.

By Stuart Alford QC, Daniel Smith and Clare Nida

The English High Court has reconfirmed that litigation privilege can apply to information gathering in internal investigations. Specifically, lawyers must have engaged in the information gathering for the dominant purpose of conducting litigation, and this can include prospective claims by tax authorities.

Case Background and previous decisions

Bilta UK Ltd. is an English company that was compulsorily wound up in November 2009 pursuant to a petition presented by HM Revenue and Customs (HMRC). In Bilta (UK) Ltd v Royal Bank Of Scotland Plc & Anor [2017] EWHC 3535 (Ch), the liquidators of Bilta sought disclosure and inspection of documents, including interview transcripts that the Royal Bank of Scotland (RBS) had created during an HMRC tax investigation.

By Oliver Browne and Hayley Pizzey

In very broad terms, parties to English litigation disclose documents that they or their opponents may want to rely upon — even if the disclosed documents are adverse to the disclosing party. Parties may seek orders for further disclosure in certain circumstances. The rules on disclosure are set out in Part 31 of the Civil Procedure Rules (the CPR) and Practice Directions 31A, 31B, and 31C (the last of which is new and applicable to competition cases only).

A recent decision in Vodafone Group Services Ltd & Ors v Infineon Technologies AG & Ors[i] highlighted some limits of further disclosure orders.

The decision

Certain Vodafone group companies have commenced a damages claim following on from a decision of the European Commission, in which the Commission found that Infineon Technologies and certain other smart card chip manufacturers had participated in a European Economic Area (EEA)-wide cartel involving the supply of smart card chips. Vodafone’s estimated damages are said to be approximately £150 million and the parties were likely to spend around £30 million in total to take the case to trial.

By Howard Sobel, Michele Johnson, Sarah Diamond and Anna Hyde

Following nearly every announcement of a public-company acquisition in the US, including take-private acquisitions by private equity investors, plaintiffs’ law firms file class actions on behalf of shareholders.

These actions are usually based on allegations that the target board of directors breached fiduciary duty (for example, that the directors provided inadequate disclosure to shareholders or have a conflict of interest in the proposed acquisition). The plaintiffs’ law firms commonly ask the court to enjoin the target company’s shareholder vote, often to extract a quick settlement. However, settlements in such cases rarely benefit the shareholders who, in return for dropping all future claims against the target and its board of directors, obtain some limited supplemental disclosure and payment of the plaintiff law firms’ over-sized legal fees (the so-called “disclosure only” settlement).