Commercial Dispute Resolution Newsletter - June 2017

Overview

Against the backdrop of recent world events, the English courts and arbitral institutions have remained busy. Parties whose ongoing business relations could be potentially affected by Brexit should review relevant agreements and take appropriate action. The Supreme Court recently confirmed the correct approach to contractual interpretation involves considering the text and the context though not negotiations leading to the agreement. The Court of Appeal has repeatedly shown greater flexibility to the variation of agreements even for contracts which contain anti-variation clauses. The English courts have also clearly set out the guidelines for banks in dealings with sophisticated commercial investors and what constitutes an unconscionable bargain. A number of disputes in relation to settlements have served as a useful reminder that parties must take as much care in identifying parties and claims when concluding proceedings as when commencing them. Some recent decisions have clarified when parties may be ordered to disclose without prejudice or legally privileged communications. Certain key pointers in relation to costs issues can also be distilled from recent case law. The English courts are increasingly accepting of the use of technology in litigation. In response to a backlog of work in the Court of Appeal, the CPR has been amended to provide for the increased use of paper applications and the test for second appeals has also been clarified.

Brexit

The effect of Brexit on foreign currency exchange rates is already being felt in costs calculations in the English courts. In Elkamet Kunststofftechnik GmnH v Saint-Gobain Glass France SA [2016] EWHC 3421 (Pat), the High Court ordered an additional payment of costs be made to reflect the loss caused by the decline in the exchange rate between the pound and the euro since the EU referendum in June 2016...

Third party funding

Third party funding is gaining in popularity. Usually the cost of financing legal fees is not recoverable because any uplift payable to a funder is neither a "cost" nor a reflection of "damage" suffered; it is instead the result of a contractual bargain between the funder and litigant. However, in Essar Oilfied Services Ltd v Norscot Rig Management Pvt Ltd [2016] EWHC (Comm) 2361, it was held that those potentially substantial costs may be recoverable in arbitrations...

Supreme Court guidance on contractual interpretation

Wood (Respondent) v Capita Insurance...