Commercial Disputes - What's New?

• Published date: 08 November 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Contracts and Commercial Law, Arbitration & Dispute Resolution
• Law Firm: PDT Solicitors
• Author: Mr William Angas, Justin McConville, Ben Ashworth and Laura Sutton

Welcome to the first edition of our monthly round up of key commercial litigation developments from the courts of England & Wales, keeping you up-to-date with learning points from when commercial matters go wrong.

Each month we will share with you some recent cases with practical implications that we think will be of interest to you and practical actions you should consider sharing with colleagues. The facts considered by the courts often take place long before lawyers become involved.

This month's update includes lessons from recent litigation concerning the Sex Pistols, a Bonhams auction and a case which went very wrong for a claimant because a key witness wasn't called to give evidence.

'I could be wrong, I could be right': When 'without prejudice' communications shift to 'open' communications

Jones v Lydon [2021] EWHC 2322 (Ch)

The lyrics in the heading are a nod to a decision of the High Court which stems from a dispute between the band members of the Sex Pistols. Former drummer Paul Cook and guitarist Steve Jones sued John Lydon, aka Johnny Rotten, after he tried to veto the use of the punk group's songs in a TV documentary.

The effect of marking a communication "without prejudice" is that it cannot be relied on in court proceedings as evidence. The High Court decided that the protection attached to a chain of emails marked 'without prejudice' also extended to a later email even though it was not labelled 'without prejudice'. The later email clearly followed on from the prior emails aiming to resolve the parties' dispute and there was no clear indication that the sender of the email wished to shift to 'open' communications (which would entitle Mr Lydon to rely on the email as evidence in the court proceedings).

This decision is a useful reminder that the content of a communication is key rather than how it is headed. That said, achieving clarity is obviously preferable to leaving the question open, and any written communication should aim to clearly express the intention of the writer.

In practical terms, if you are engaged in settlement negotiations and intend a communication to be 'open' (and able to be relied on as evidence subsequently), you should make this clear, and in a separate document which does not refer to the settlement discussions.

An adverse inference may be drawn from a failure to call a relevant witness

Ahuja Investments Ltd v Victorygame Ltd [2021] EWHC 2382 (Ch)

This case is a useful reminder of the principle that, in certain...