DR Essentials: No Contract? No problem!

By Bryony Hurst, Jane Goodacre


Bird & Bird & First for Disputes

When one business looks to create a commercial relationship with another, one of the first items on the agenda is to consider the contractual framework in which the parties will operate. Parties can spend a significant amount of time and effort carefully curating terms and conditions which mitigate potential foreseeable risks involved with the relationship whilst enhancing the commercial benefits. When things go wrong, a sensible starting point is therefore to consider contractual remedies. But, if your contract has gaps, or for some other reason contract law will not assist you, where else can you turn if your commercial interests are being threatened or you've already suffered loss?

Before it was common business practice to enter into contracts to protect our legal rights, our judiciary had to devise creative ways in which to protect parties who suffered a loss to their commercial interests due to another's wrong doing. The courts did this by developing the law of economic torts. Over the past decade or so we have seen a resurgence in parties relying upon these remedies in legal actions when either there is no contract in place, or the contract provides no answer to the wrong suffered. This may be partially due to the courts providing clarity as to what has previously been viewed as an opaque area of the law, and partially due to contracts having being frustrated in the wake of the financial crisis.

So what is an economic tort? There are several types of economic tort; each has some elements in common and the overlap between them can give rise to confusion. Understanding how to distinguish between them and when each might be of assistance in a given situation is crucial to broadening your options when a commercial relationship begins to break down.

During our DR Essentials Breakfast Briefing on 10 May 2017, we will guide you through the main economic torts including:

Inducing breach of contract;

  • Causing loss by unlawful means; and
  • Conspiracy (lawful and unlawful).

We will also briefly discuss other tortious causes of action which may be useful to have in your arsenal, including breach of confidence (if information exchanged with the other party has been disclosed unlawfully), negligence (where performance has fallen short of the expected standard), deceit and negligent misstatement (where you have acted upon false information to your detriment).

During the session, in addition to providing a refresher on the components of each of the above causes of action, Bryony Hurst and Jane Goodacre will also be talking about the circumstances in which you may need to consider tortious claims rather than contractual ones, how these are used in practice and potential pitfalls to be aware of before embarking on an action.

If you would like to attend The DR Essentials Breakfast Briefing on 10 May, please click here.

For more DR Essentials briefings as well as a country comparison tool on core DR topics, access to our Global Arbitration Toolkit and much more, please go to our new Disputes+ KnowHow Portal.