Round-up December 2020

Settlement and subject to contract

The parties' solicitors' written communications did not establish a binding contract for settlement of a dispute because they were stated to be "subject to contract".  The consent order is the equivalent of the formal contract in this context. The Court of Appeal reversed the decision below; the judge had placed insufficient weight on the parties’ failure to change the “subject to contract” status of their negotiations (Joanne Properties Ltd v Moneything Capital Ltd).

Arbitrators and bias

The Supreme Court considered the circumstances in which an arbitrator in an international arbitration may appear to be biased. The acceptance of multiple appointments involving a common party and the same or overlapping subject matter may give rise to an appearance of bias. Whether it does so will depend on the facts of the case and the customs and practice in the relevant field of arbitration. Where the circumstances might reasonably give rise to a conclusion that there was a real possibility of bias, the arbitrator is under a legal duty to disclose the appointments unless the parties to arbitration have agreed otherwise (Halliburton Company v Chubb Bermuda Insurance Ltd).

Limitation and mistakes of law

The Supreme Court held that section 32(1)(c) of the Limitation Act 1980 does not only apply to mistakes of fact, as argued by HMRC, but also applies to claims for the restitution of money paid under a mistake of law. Time begins to run when the claimant discovers, or could with reasonable diligence discover, their mistake in the sense of recognising that a worthwhile claim arises (Franked Investment Income (“FII”) Group Litigation).

Deemed service rules under CPR 6.26

The Royal Mail's "signed for 1st class" service falls within the definition of “first class post (or other service which provides for delivery on the next business day)” in CPR 6.26 so that service by this method is deemed to have taken place the second working day after the item was posted (Diriye v Bojaj – see our briefing Be particular about particulars). 

Claimants’ Part 36 offers

CPR 36.17(4) provides that, where a claimant has obtained judgment against a defendant which is at least as advantageous as the claimant’s Part 36 offer, the court must, unless it considers it is unjust to do so, order that the claimant is entitled to four specified forms of enhanced relief. The Court of Appeal held that the judge’s refusal to award two of the four forms of relief – an enhanced rate of interest on both the judgment sum and the claimant’s costs – was wrong. Reasonable conduct on the part of the defendant is not sufficient, in itself, to render it unjust to make an award of interest. The fact that the defendant Ofcom was a public body (and that public money was at stake) did not excuse Ofcom from the consequences of failing to accept a Part 36 offer which it failed to beat at trial (Telefonica UK Ltd v The Office of Communications).