Bird & Bird's Dispute Resolution UK December 2020 update

In this edition we have curated a selection of the content our UK disputes team has published since the summer. This includes articles that deal directly with the pandemic, issues relating to business interruption insurance, general contract matters, data privacy, privilege, adr, arbitration and of course, Brexit. To view the detail please scroll down.

You will also find copies of all our articles together with other disputes related know how on Disputes+, our easy access disputes knowledge portal. Please click the link to access Disputes+.

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COVID-19

The pandemic has caused a change to the way many businesses transact resulting in variations to contractual arrangements. With uncertainty set to continue into 2021 we have set out below a selection of articles that consider the way the approach to contractual terminations, force majeure, inability to pay suppliers and disputes has changed since March 2020 and practical steps to take in light of this.

We have also highlighted how the English courts have reacted to the pandemic. Using our IPO and Courts tracker you can see at a glance the current position regarding how courts and IP offices in jurisdictions all over the world have been affected by COVID-19.

• Has COVID-19 transformed our response to contractual terminations? – By Victoria Hobbs, Louise Lanzkron
• High Court decides that timing of coronavirus restrictions was not a relevant force majeure event entitling termination of aircraft lease By Sophie Eyre, Louise Lanzkron, Thomas Davies
• Corporate Insolvency and Governance Act 2020: temporary COVID-19 measures extended - By Jordan Cooper, Alex Kelly
• The UK legal system: embracing technological change - By Jeremy Sharman, Priyan Meewella, Matthew Pack

Business Interruption Insurance

Businesses around the world have been affected by extensive disruption and/or closure as a result of the Coronavirus pandemic. This had led to enormous financial loss in addition to other economic and personal hardships. Many businesses have made claims to seek to recover these financial losses under their Business Interruption (BI) insurance policies.

In the UK the Financial Conduct Authority (FCA) brought a test case seeking clarification of policy wording. The High Court gave its judgment in September and Partner Victoria Hobbs, associates Russell Williamson and Megan Curzon and trainee Phillipus Putter wrote a summary of the outcome in English High Court provides welcome guidance for policyholders in FCA Business Interruption Insurance test case. The parties were granted leave to appeal and to 'leapfrog' straight to the UK Supreme Court. The appeal was heard during the week commencing 16 November. Judgment is expected in the new year.

The FCA test case was not the only dispute regarding BI Insurance to reach the courts this year. In High Court rules in favour of insurer on physical damage in COVID-19 business interruption insurance claim, Russell Williamson and trainee Thomas Davies consider a claim where the insurance policy provided BI cover for physical damage only.

Our Business Interruption insurance and COVID-19 Tracker lets you see at a glance how the regulators and courts in a variety of jurisdictions view BI insurance policies and the coverage claims that have been made.

Contract

Caroline Brown and Victoria Hobbs explain an important change to the way HMRC now applies VAT to certain types of termination payments in HMRC VAT change affects payments made to terminate a contract. The change means that payments you received without VAT under a settlement at any point in the last 4 years will need to be reexamined to check whether you (or the other party) now needs to pay VAT in respect of the payment.

We have also considered how the pandemic has altered the contractual landscape in a number of articles:

• High Court decides that timing of coronavirus restrictions was not a relevant force majeure event entitling termination of aircraft lease - By Sophie Eyre, Louise Lanzkron, Thomas Davies
• Has COVID-19 transformed our response to contractual terminations? – Victoria Hobbs and Louise Lanzkron

Data Privacy

It has been more than two years since the GDPR and Data Protection Act 2018 came into force. Partner, Bryony Hurst considers in a two part series, why the predicted tidal wave of collective actions has only just started to materialise, the types of claims that have been commenced so far, and actions companies can take to prepare for claims that may head their way: Riding the tidal wave Part One and Riding the tidal wave Part Two

Bryony has also examined the recent High Court decision in Aven v Orbis which will be of interest if you are a data controller compiling reports on individuals which, at some point, may need to be disclosed to third parties. Aven v Orbis: blurring the lines between defamation and data protection claims

Privilege

In an important judgment for businesses with legal teams based across a number of jurisdictions the Commercial Court has held that legal advice privilege under English law extends to communications with foreign inhouse lawyers provided they act in their capacity as a lawyer. Partner Jonathan Speed and trainee Andrea Trattner discuss the decision in English Commercial Court confirms that legal advice privilege applies to foreign lawyers including those who work in-house.

ADR

Partner Jeremy Sharman and trainee Alexander Grigg consider a recent judgment of the High Court which has again reminded litigants that an unreasonable refusal to mediate by a successful party at trial can lead to that party facing adverse costs consequences: Recent English High Court Judgment reminds litigants of the cost implications of unreasonably refusing to mediate.

Reflective Loss

In a landmark decision, the Supreme Court confirmed that the principle of reflective loss restricted the ability of shareholders to claim damages in respect of a reduction in the value of their shares due to loss suffered to company, but that this principle did not extend to claims made by individuals in other capacities, such as creditors. Partner Sophie Eyre and associate Megan Curzon discuss the judgment in English Supreme Court narrows the scope of reflective loss Sevilleja v Marex Financial Ltd.

Arbitration

Associate Rhiannon Price and trainee Harry Arnold consider the impact of the UK Supreme Court judgment in Enka v Chubb: The UK Supreme Court settles the proper approach to the law governing an arbitration agreement. They discuss that the judgment is an essential read for arbitration practitioners because it provides vital guidance on what happens when there is no clear choice of law in an arbitration agreement. Enka also acts as a stark warning against unclear or ill-considered arbitration clauses.

The LCIA published a new set of rules in October. There is a notable shift towards the use of technology, with electronic communication being the primary method of communication. Partner Sophie Eyre and associates Yvanna Miller and Rebecca Slater discuss what this means for parties who will be involved with LCIA arbitration proceedings in ‘Light-touch’ changes have been made to the new The LCIA Rules 2020 in force from 1 October 2020.

Brexit

At the time of writing a deal between the UK and the EU has still not been agreed. Partner Victoria Hobbs and knowledge development lawyer Louise Lanzkron consider What will happen to Cross Border Disputes on 1 January 2021?