Entries from January 2007 ↓

The recent case of Marplace (No. 512) Limited v Chaffe Street [2006] revisits some of the issues raised in Football League Ltd v Edge Ellison (a Firm) [2006] EWHC 1462 regarding the scope of a solicitor’s duty to advise on the commercial aspects of a transaction, and caps on solicitor’s liability for negligence. The firm of solicitors advised a company on a corporate acquisition. For various reasons the acquisition went wrong and the solicitors were accused of negligence.

Ultimately the solicitors were found not to be negligent. The scope of a solicitor’s duty depended on the context of his instructions from his client. 

A solicitor may be duty bound to proffer unsolicited advice or seek further instructions for example, if they were not involved in the negotiation of a transaction but were simply instructed to implement that transaction, the solicitor must still point out any legal obscurities of which the client may be unaware, or point out any hidden pitfalls.

However, a solicitor is not under a duty to review the whole range of commercial considerations underlying a particular deal to which the client may have given insufficient thought. In this instance, the solicitors in question had been entitled to take the view that their clients were intelligent, sophisticated and experienced businessmen who were perfectly able to seek advice if they desired it.

The case went on to comment on the cap on liability.  The solicitors letter of engagement said “You agree that … our maximum aggregate liability to you in the event of professional negligence on any matter in relation to which we are instructed shall be £20 million… should you want to vary these limitations we shall be pleased to discuss it with you but we reserve the right to vary our fees accordingly”.

As context:

• Chaffe Street’s turnover was low - about £4 million.
• The amount of the limitation set by Chaffe Street with its various clients did vary from one transaction to another.
• Chaffe Street’s insurance at the time of the alleged breach was £25 million.
• Chaffe Street accepted that the Unfair Contract Terms Act applied to the cap on liability and therefore they were obliged to demonstrate it was reasonable.

The court did find that limitation was reasonable for the following reasons:

• The claimant was a sophisticated and wealthy consumer, and therefore the bargaining positions of the parties were equal. In particular the claimant was used to contracting with professionals and the basis of limitations of liability.
• The claimant was aware of the cap on liability and had in fact discussed it with Chaffe Street. It had not been imposed as a non-negotiable term (albeit the court recognises that it would have probably been difficult to switch solicitors at the time).
• The engagement letter made it clear that if the claimant wanted different limitations of liability then Chaffe Street was prepared to discuss that.
• Chaffe Street determined the £20 million limit on reasonable commercial principles taking into account insurance cover, expenses and circumstances of the transaction.

We don’t frequently get suggestions from the court as to what levels of limitation of liability will be reasonable under UCTA.  It’s always nice when one comes along!

In the case of Point Solutions Limited v Focus Business Solutions Limited and another [2007] EWCA Civ 14 [from BAILII], Point Solutions were appealing the decision to decline their request for a declaration that they had not infringed the IPR of Focus in developing its software.  Point had had access to Focus’ software during a period of providing outsourcing services to Focus.

The court found that without the instruction of an expert to assess whether there had been any infringement, and for a number of other reasons, Point had not been able to satisfy the court that it had independently created the software.  There was no reason for Point to require the declaration - Point could alternatively resolve the dispute by appointing an independent expert to determine whether or not copying had taken place.

In what was all in all an unsatisfactory judgement, Chadwick LJ pointed out that the case could have been avoided if the parties had simply appointed a joint expert as ordered by an earlier hearing - without this, insufficient evidence was placed before the court to enable it to make such a declaration.

Yes!

The recent decision notice of the ICO made against Hertfordshire County Council accepted that some of the information being requested was subject to a contractual obligation of confidence (other information was not received from a third party, so the section 41 exemption could not apply anyway).  Not only that, but it had the necessary qualities of confidence (the circumstances imparted an obligation of confidence, the information was not trivial and was not available by other means).  But even so, the section 41 exemption did not mean that the information should be withheld.

Why?

Because in order for a disclosure to constitute an actionable breach of confidence, the common law of confidence requires that there is not a defence that the disclosure was in the public interest.  In this case the ICO considered that it was in the public interest to disclose how the Council was investing taxpayers’ money, and therefore there would have been no breach of that obligation.

Lesson: just because you have a confidentiality provision in your contract with a public authority does not mean that it will escape disclosure under FOIA.  You need to be really sure that the information truly is confidential, and that there is no overriding public interest requiring its disclosure.  Moreover, you must be aware that the only information protected is that moving from the private company to the public authority - the contract itself, information developed by both parties and information provided by the public authority will not benefit from the exemption.

The European Commission’s Internal Market Directorate-General commissioned a report, now published, into Copyright and Related Rights for the Knowledge Economy. With the full report running to over 300 pages, I’d recommend taking a look only at the executive summary. They have grappled with a whole range of issues relating to the changing ways in which we use information, and the international nature of that use. However, 15 years of harmonisation in the EU has, according to the report, brought both benefits and drawbacks.

The Information Commissioner’s Office has published an opinion on NHS Electronic Care Records. At only 4 pages long, it can’t really go in to all the ins and outs of personal data in the NHS, but it makes clear that the ICO expects the NHS to comply with the Data Protection Act and have sufficient conditions for processing. Contrary to a lot of the press coverage, it seems that the ICO has been reassured by promises that consultations with patients will occur before information is uploaded, and opportunities to opt-out of the collection of certain information will be given.