Tag Archives: Contract

European Regional Development Funds (ERDF): Group of Councils (South Yorkshire and five Merseyside) are given leave to appeal to the Supreme Court to challenge allocation of EU (ERDF) structural funds – including the Public Sector Equality Duty

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In R (Rotherham Borough Council et al) v Secretary of State v Business and Skills [2014] EWCA 1080 it has been very recently reported that the Councils in the appeal, had disappointingly suffered a defeat in the Court of Appeal (on 28 July) in their claim for judicial review. That much is true.

However on 30 July (yesterday), the combined Councils’ expedited appeal, including the assertion that the Government owed a public sector equality duty pursuant to section 149 of the Equality Act 2010 has won favour in the UK Supreme Court and is due to be heard on 22 October.

The combined appeals included breaches of UK and EC law directed at the Government’s failure in duty by producing discriminatory and disproportionate cuts in ERDF funding cuts for their regions – as found at first instance by Stewart J.
This appeal will be of great interest and importance to Universities for a host of reasons, not the least of which being:

1. Novel arguments related to the macroeconomic funding including ERDF will be passed through the prism of high level EU principles of equal treatment and proportionality in the Department of Business Innovation and Skills failure to treat the Regions in the same way as other regions – the Court of Appeal indicated that the Commission had not imposed a legal standard as to how to allocate funds to transition or any other regions, and even if one were found a very high threshold of unreasonableness would need to be reached.

2. The public sector equality duty (the PSED) pursuant to section 149 of the Equality Act 2010 will also be relied upon in a very novel way to assert equal treatment, and to uphold the decision at first instance that the PSED was breached by the Government – Stewart J paragraph 93.

3. The wide margins of discretion and the broad discretionary brush wielded by Government in making political economic and social choice in allocation of funding had to involve exercise of broad discretion; pursuing objectives including ‘a target for improving conditions for research and development’ and a target for reducing greenhouse gases and emissions and increasing energy efficiency, was described as ‘classic territory for affording the decision maker a wide margin of discretion’ (at paragraph 57 of the Court of Appeal decision – Dyson MR)

4. The equal treatment principle, which requires that ‘comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified’. The principle was put more shortly: ‘Has there been a failure to treat like cases alike (and unlike cases differently)?’ The entire appeal was summarised to be about how the equal treatment principle should be applied; and what margin of discretion should be afforded to the Secretary of State when deciding whether different categories are alike or unalike – whether Liverpool could be compared with Highlands and Islands, or Northern Ireland in a meaningful sense (the ‘comparability question’). There is (apparently) no authority as to the issue as to the exercise of margin of discretion of the decision maker (in this case of the Secretary of State for Business Innovation and Skills) on the question of ‘comparability’ – and there lies the rub.

5. The Court of Appeal set out the comparators of the economic performance of the different regions, and they are the list that would be familiar to Universities in ERDF funding: general economic performance of different regions, respective employment rates for aged based groups, and significantly ‘conditions for research and development’ and respective greenhouse gas emissions (cf. the Energy Efficiency funding stream etc). The Court of Appeal perhaps rightly emphasised that the comparison exercise between regions was ‘multi-factorial’ – and then decided that the ‘decision maker is entitled to a wide margin of discretion in making such a decision’ – which should only be interfered with if a high standard of unreasonableness was met. It is difficult in my view to take sides on such an argument, but the University sector (indeed any party receiving ERDF funding) ought to be watching the progress of the appeal closely.

6. There was concern expressed in the appeal that the Councils’ domestic appeals (to be heard in October this year) would prejudice recipients in Funds in other regions, if not derail the entire ERDF funding stream itself. It was evident that the Commission’s position regarding the lawfulness of the Government’s policy was not formally known, and the parties were advised to obtain information and advise on further appeal as to the Commission’s position vis a vis the parties – central and local government. However, an expedited appeal, resulting from a permission hurried into the Supreme Court on the last day of term, is at least a first brisk step towards clarity. The issue as to whether following the forthcoming appeal there could be a reference to the European Court also remains open, and much would depend on the general position the Commission takes, which is currently unknown.

The decision of Justice Stewart:

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Admin/2014/232.html&query=rotherham&method=boolean

the decision of the Court of Appeal on 28 July 2014:

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2014/1080.html&query=rotherham&method=boolean

Useful Local Government Article by Mark Smulian on the Court of Appeal defeat:

http://localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=19461%3Agroup-of-councils-loses-court-of-appeal-battle-over-eu-structural-funds&catid=56&Itemid=24

Supreme Court decision in ‘FHR European Ventures v Cedar Capital Partners’ – bribes and secret commissions accepted by an agent (as a fiduciary) are held on trust for the principal – an important clarification

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This case was the subject of a previous Blog; the hearing of the appeal being heard 17 to 19 June 2014, which was available for viewing on the live feed of the UK Supreme Court.

In the above decision, Lord Neuberger has confirmed at paragraph 7 (page 4 of the judgment) that a principal has a right to an account and equitable compensation for a bribe or secret commission. It was also recognised that where an agent acquires a benefit in breach of fiduciary duty, the relief is primarily restitutionary or restorative, rather than compensatory. As previously explored, restitutionary responses (as here) involve the agent giving back the enrichment received at the expense of the principal, as opposed to merely confining the principal to a claim for compensation for loss – probably by way of the personal claim only. This decision is much more expansive remedially.

The basic rule, according to FHR European Ventures’ should now be that an agent who obtains a benefit in breach of his fiduciary duty to his principal holds that benefit on trust for his principal. Equity for the present day (common law and equity having been fused since the Judicature Act 1873) has recognised the existence of a new proprietary right against agents in receipt of bribes or secret commissions.

At paragraph 7 of the Judgment it was further emphasised that the agent’s duty to account for the bribe or secret commission was a personal remedy in favour of the principal, against the agent.
The second important clarification made at paragraph 7 concerned the ‘equitable Rule’, which was stated to be that where a benefit is acquired by the agent as a result of his fiduciary position:
‘…the equitable rule is that he is to be treated as having acquired the benefit on behalf of his principal, so that it is beneficially owned by the principal. In such cases, the principal has a proprietary remedy in addition to his personal remedy against the agent and the principal can elect between the two remedies.’ (end of paragraph 7).

What are the practical implications? The practical implications for Universities
The Judgment covers much more of interest than what follows of course, however some of the general commentators have drawn out the following significant practical implications:

Firstly, the rule is not confined to agents and principals per se. The net is cast over other recognisable fiduciary relationships – employer-employee, company director, and persons acting in an official capacity, and of trustees acting under a formal trust. Universities are not uniquely affected by this change, but should audit transactions that involve potential conflicts of interest including any parties in transactions receiving commissions.

Secondly, full blown proprietary claims, coupled with the process of tracing (tracing as the process identifying the enrichment, which is now proprietary, and following substitutions of the property, in whatever form that substitution might take) can be made in the usual way, including tracing into the hands of third parties; subject to the usual defences for recipients of bona fide purchase. The proof of the existence of a proprietary base, following an agent’s receipt of a secret commission, would include the concurrent liability of the agent to a personal claim. Claimants could opt for making either a personal or a proprietary claim, depending upon the particular facts of the case.

All the usual remedies will remain, including Freezing orders, but would now be used in tandem with remedies for preserving proprietary interests.

Finally, agents in light of the confirmation that there is a proprietary base (inferred from the agent’s fiduciary status) in bribes and commissions, will need to inquire thoroughly into conflicts of interest that could arise from payments, or where possible, seek formal consent from principals to the receipt of any commissions. This is not a change unique to Universities, but highlights the need for parties to make detailed enquiries as to potential conflicts, and whether consents have been granted regarding commission payments. This would include enquiries from parties along the line of any transaction in which a University is involved where there is likelihood of commission payments. Once tracing has done its work, a Claimant wronged party can now hook the property or its value back from any party in the chain or into whose hands the property or its value has been traceably and survivably received – subject to defences.

The concern (‘traceable’ all the way back to Lister v Stubbs and further) that a proprietary claim against an agent was wrong and was never part of the law, for it would mean that unsecured creditors claims against an insolvent agent would be trumped by the proprietary claim of the principal; has been rejected. Lister v Stubbs, for good or ill, has been overruled.

FHR European Ventures Press Summary:

Click to access UKSC_2013_0049_PressSummary.pdf

FHR European Ventures v Cedar Capital: Judgment

Click to access UKSC_2013_0049_Judgment.pdf

Proprietary rights in payment of bribes and secret commissions coming home? Perhaps this week.

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The Football World Cup as global drama seems, by dint of the sheer brilliance of the players, to have shaken off preoccupations about the beautiful game’s darker subplot – including the Qatari allegations of bribes and secret commissions. It is currently speculated that such payments, if proven could result in a re-run of the entire bidding process for the staging of the 2022 World Cup. The case of FHR Ventures LLP v Cedar Capital Partners (and Mr Mankarious) is more modest in remedial terms – the principal seeking to recover back the value received by the agent (the first measure of the agent’s enrichment), or the value surviving (the second measure of enrichment) or traceable in the hands of the agent or third parties (if a proprietary claim is for the first time recognised by the Supreme Court) in agency type cases.

Relevance of this bribery case to Universities:

All Government contracts contain provisions relating to the criminal law and the Bribery Act 2010, however any University would still have to fall back on the common law to seek the recovery of bribes and secret commissions in all their general contracts so this week’s appeal is highly relevant to our general contracting position and a useful reminder of the current state of the law.

The question before the UK Supreme Court this week does not perhaps include the category of corrupt payments in the form of a bribe, however it does include the remedial consequences of secret commissions, and bribes to agents, and whether the beneficiaries could seek recovery not merely as a personal claim but also upon a constructive trust, and allow recovery on a proprietary basis.

This is an age old problem – best illustrated by the nineteenth century case of Lister v Stubbs [1890] 45 Ch D 1 (the claim against an agent receiving a secret commission, the principal being confined to only a personal claim for value received by the agent) closing off any possibility of a proprietary claim by trust, constructive or otherwise. Lister was not followed in the later Privy Council decision (a bribe case involving a Government prosecuting official) in Hong Kong v Reid [1994] 1 AC 324.

The Supreme Court website has put the question on appeal as follows:
Does an agent who receives a secret commission hold the sum paid on constructive trust for his principal(s) giving rise to proprietary rights?
The facts
The applicants in the appeal are a company called Cedar Capital Partners (CCP/’Cedar’) who together with a Mr Mankarious entered into an agreement (an exclusive Brokerage Agreement) with the owners of a hotel in Monte Carlo, for Cedar to arrange for the sale of the hotel in exchange for a fee of €10m. Cedar subsequently acted as agent on behalf of the respondents in the appeal, who were a consortium who wished to purchase the hotel for €211.5m. The €10m fee was paid to Cedar in accordance with the Brokerage Agreement within 5 days of the owners of the hotel receiving the payment price for the hotel from the consortium. The €10m fee (paid by the vendor to the agent Cedar) was a payment unknown to the consortium (purchasers) on the facts.
When the consortium discovered the payment of the €10m to Cedar/Mr Mankarious, they sought recovery of the payment from Cedar/Mr Mankarious. They succeeded before Justice Simon in obtaining an account for the €10m, however the judge held that the claim was personal only (‘in personam’) and the money held by Mr Mankarious was not held on a proprietary basis, on a constructive trust or otherwise.

The Court of Appeal reversed this decision, and held that in receiving the secret commission, Cedar/Mr Mankarious had exploited an opportunity properly belonging to the consortium, and accordingly the €10m fee was to be held on a constructive trust, which was proprietary in nature, and therefore traceable as surviving enrichments in substitutions (eg. where the €10m was used to purchase property as a substitute for the original enrichment, or paid into or converted into property through other media such a bank account etc).
This proprietary quality in the enrichment is the subject of the appeal – a claim and legal right not previously recognised at the highest Court level in relation to agents receiving secret commissions or bribes.
The general concern has been to disallow a beneficiary principal gaining priority in an insolvency claim in the insolvent fraudster’s estate, but this legal policy might change next week.

There are seven Supreme Court Justices listed; and Lord Collins has been called back into the squad as an impact player for his understanding of Company law, insolvency and priority. It would be mixing metaphors to say he has come off the bench, in fact being called back ‘to’ the Bench!

Lord Collins appears to have been the first instance judge in Daraydan (etc) v Solland (etc) [2004] EWHC 622, involving the recovery of bribes and secret commissions charged in the refurbishment of luxury properties in London and – er Qatar. In the event that the current law of Equity undergoes a change this week, in recognising that the receipt of a secret commission or a bribe has proprietary consequences and that beneficiaries could indeed engage in the process of tracing, identify and follow substitutions made in the property to its ultimate surviving value or indeed into the hands of a third party, it will arguably add to the armoury of the victims on the margins of bribery and fraud. So as in the World Cup, there is still ‘everything to play for.’

First Instance decision of Simon J:
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Ch/2011/2308.html&query=FHR&method=boolean

Court of Appeal decision of Lewison LJ:
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2013/17.html&query=FHR&method=boolean

the decision of Lawrence Collins J in Daraydan (etc) v Solland (etc) [2004] EWHC 622:
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Ch/2004/622.html&query=collins+and+qatar&method=boolean

Temporary copies (on-screen) and the cached copies: not requiring permission of the copyright holder? The European Court wades in ‘Meltwater’

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Public Relations Consultants Association Ltd v Newspaper Licensing Authority and others
Newspaper Licensing Authority v Meltwater [2013] UKSC 18

The Court of Justice of the European Union – Judgment made on 5 June 2014 – Temporary acts of (copyright) reproduction within section 28A of the Copyright Deigns and Patents Act 1988

This blog is an update from those previous, dealing with the above Meltwater Judgment of the UK Supreme Court (see links below). The facts can be found in the previous blogs on this subject; however it is clear that the decision is of great assistance to the consultant company (Meltwater) and its Association; the case will presumably be remitted back to the UK Court to finalise the issue of costs – what appears to be a substantial victory in terms of their accessing temporary copies of copyright works. In the writers’ view this appears to be a logical result in terms of the general functionality of the Internet, but the writer anticipates that ‘Paywalls’ and other secure access portals to copyright works, such as News media will perhaps proliferate to a greater extent. Readers will recall the gist of the UK Supreme Court decision, namely that viewing the Meltwater report(s) on the website appears to be covered by the ‘temporary copies’ exception within section 28A of the Copyright Designs and Patents Act 1988.

The reference to the Court of Justice of the European Union

It will also hopefully be recalled (from the previous blog) that Lord Sumption stated that the issue in the appeal has a ‘transnational dimension’ and that the application of copyright law to internet use has important implications for many millions of people across the EU making use of what has become a basic technical facility.’

The questions referred by the UK Supreme Court were as follows (see paragraph 20 of the CJEU judgment):
In circumstances where :

an end-user views a web-page without downloading, printing or otherwise setting out to make a copy of it ;
copies of that web-page are automatically made on screen and in the internet “cache” on the end-user’s hard disk;
the creation of those copies is indispensable to the technical processes involved in correct and efficient internet browsing;

the screen copy remains on screen until the end-user moves away from the relevant web-page, when it is automatically deleted by the normal operation of the computer;

the cached copy remains in the cache until it is overwritten by other material as the end-user views further web-pages, when it is automatically deleted by the normal operation of the computer;
and the copies are retained for no longer than the ordinary processes associated with internet use referred to at (iv) and (v) above continue;

Are such copies (i) temporary, (ii) transient or incidental and (iii) an integral and essential part of the technological process within the meaning of Article 5(1) of Directive 2001/29/EC1 ?
____________
1 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society
The European Court of Justice’ answer:

On those grounds the Court (Fourth Chamber hereby rules:

“Article 5 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the copies on the user’s computer screen and the copies in the internet ‘cache’ of that computer’s hard disk, made by an end-user in the course of viewing a website, satisfy the conditions that those copies must be temporary, that they must be transient or incidental in nature and that they must constitute an integral and essential part of a technological process, as well as the conditions laid down in Article 5(5) of that directive, and that they may therefore be made without the authorisation of the copyright holders.”

The following are important to note from the CJEU Judgment:

1. Paragraph 26: the on-screen and cached copies from a computer are ‘temporary in nature;

2. Paragraph 33: on-screen and cached copies are regarded as ‘an integral part of the technological process’ at issue in the main (ie.UK) proceedings

3. Paragraph 37: the on-screen copies and the cached copies are ‘an essential part of the technological process’ at issue in the UK proceedings;

4. Paragraph 46: the period during which the on-screen copies remain in existence is limited to what is necessary for the proper functioning of the technical process used for viewing websites. Consequently the copies must be regarded as ‘transient’.

5. Paragraph 54, 60 and 63: Art 5(5) of the Directive (cf. the exemption applying provided it ‘does not conflict with a normal exploitation of the work and…not unreasonably prejudice the legitimate interests of the rights holders’ was not breached and could therefore be made without authorisation from the copyright holders.

The CJEU judgment (5 June 2014) can be found at:
http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1402053921977&uri=CELEX:62013CJ0360
The Court of Appeal decision can be found at:
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2011/890.html&query=newspaper+and+licensing&method=boolean
The decision at first instance, of Mrs Justice Proudman can be found at:
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Ch/2010/3099.html&query=newspaper+and+licensing&method=boolean
The UK Supreme Court Press Summary can be found at:

Click to access UKSC_2011_0202_PressSummary.pdf

The UK Supreme Court decision (lead judgment by Lord Sumption) can be found at:

Click to access UKSC_2011_0202_Judgment.pdf

and on the Bailii Site at:

Click to access 18.pdf

Horizon 2020: Notes on the Annotated Model Grant Agreement : the General MGA

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Please find attached the link to discussion document issued by the Commission in relation to the General MGA. The preliminary discussion document refers mainly to Finance and financial information. However, it is informative in relation to clarification of contractual terms, such as the Intellectual property clauses.

For Intellectual property the following are noteworthy, the 2008 Recommendations have been well and truly dusted off, and re-emphasised:

1. the Notes emphasise the obligation to take measures to implement the ‘Commission Recommendation’ on the management of intellectual property in knowledge transfer activities (see page 23 – Section 3: Rights and Obligations related to Background (IP) and Results). The recommendation principles were that member states are required: (i) to ensure that all public research organisations define Knowledge Transfer as a strategic mission and (ii) encourage public research organisations to establish in public policies and procedures for the management of intellectual property in line with the Code of Practice set out in Annex 1 (see link to the Commission Recommendations below).

Click to access h2020-amga_en.pdf

the Link to the 2008 ‘Commission Recommendations on the Management of Intellectual Property in Knowledge Transfer Activities’
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32008H0416&from=EN

2. Article 26.4, is noteworthy (at page 179) whereby as ownership to protect Results, the Agency/Commission,
“may with the consent of the beneficiary concerned, assume ownership of results, ‘to protect them’, if a beneficiary intends up to four years after the period set out in Article 3 – to disseminate results…”

It will remain to be seen how this provision and its exceptions will operate, especially in light of the fact that Universities and commercial parties might not have had sufficient time to assess whether the IP could be commercially exploited – even after the period of 4 years following the contractual period set out in Article 3.

There are many useful Notes in the attached, including some curiosities (such as at Article 26.2, page 178). In relation to joint ownership of IP by reason of joint creation, which (in the view of the writer) begs more questions than it answers. It is arguable that the parties would separately agree ownership regardless of the manner of creation of the IP – an issue that will be further discussed in relation to Article 26.2 – the joint ownership agreements will require closer consideration.

3. At the top of page 180, there is the Note which reads: ‘Best Practice: To avoid or resolve ownership disputes, beneficiears are advised to keep documents such as laboratory notebooks to show how and when they produced the results’ Laboratory Notebooks have been the subject of a previous Blog, however the Notes cover other useful ‘Best Practice’ gems such as this.

Costs in the Intellectual Property Enterprise Court: Considering conduct of the parties when assessing costs – Access to Justice?

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Please find attached an interesting short article (following the previous Blog of 26 March 2014 herein) on the issue of costs in the recent case for making groundless threats of infringement of patent (contrary to section 70 of the Patents Act 1977), that was brought against Mr Perry.

Mr Perry apparently on 26 March 2014 circulated a letter purportedly written by ‘Mr Justice Hacon’; bizarrely reversing the decision in the proceedings. What happens in relation to costs in the light of this and other ‘intemperate’conduct as classified by the Judge?

One of the reasons the IPEC has been celebrated as a great success in terms of Access to Justice for Intellectual Property litigants, small businesses and individuals alike, is that win, lose or draw, the costs cap is set at £50,000.00. The IPEC has been a successful model Court because of the constraint put on costs – can a party’s conduct lead to release of such constraint?

The Judge indicated that the circulation of the purported letter by Mr Perry was a further example of ‘intemperate and eccentric behaviour’ (paragraph 14) in the conduct of of those proceedings; however it is difficult (in the view of the writer) to discern when the conduct of a party becomes ‘truly exceptional’ having regard to the conduct of the parties when assessing costs. Judge Hacon’s decision, notably paragraphs 10 to 17 (under the heading ‘Departure from the costs cap and scale of costs’) explains why in this case the total award of costs against Mr Perry was not granted above the cap of £50,000.00.

Further Judgment of Judge Hacon of the Intellectual Property Enterprise Court (IPEC) dated 2 April 2014

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/IPEC/2014/979.html&query=brundle+and+v+and+perry&method=boolean

IPKat Blog discussing the above costs decision:

http://ipkitten.blogspot.co.uk/2014/04/forging-new-path-cost-caps-and-contrary.html

New legislation removing unlimited liability of Cooperatives: a challenge to the Community Interest Company and others?

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Please find attached an article in the Guardian related to new legislation (the Cooperative and Community Benefit Societies Act 2014) that appears to remove the historic burden of unlimited liability on Cooperatives; perhaps this will lead to a Renaissance of the Cooperative Society as an economic and social force?

The legislative changes will be reviewed in a separate blog.

http://www.theguardian.com/social-enterprise-network/2014/feb/25/cooperatives-mutuals-compete-law-commercial-competitors#start-of-comments

Valuing Consultancy Services: Benedetti v Sawaris revisited

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This short note of the appeal in Benedetti, is an attempt to summarise parts of the decision from the extraordinarily learned judgment of Lord Reed, and Lords Clarke and Neuberger, which emphasise the following:

Where ‘Services’ are provided without agreement – regard should be had to Objective market value or market price, at the time of the provision of the service – the value to the recipient of the services is assessed on an objective basis, i.e. the price which a reasonable person in the position of the Defendant would have paid for the Services.

The arguments of the Appellant included whether it should be the value the parties put on the services? Including the late offers by the Defendants, the answer was a decisive no, as Lord Clarke emphasised below:

Lord Clarke at paragraph 30:

‘In the present case it is accepted that Mr Benedetti’s services had an objective value. The issue is whether subjective revaluation can be relied upon, not in order to identify a benefit, but in order to value the benefit so conferred. In my opinion, that is not permissible. Although there is some academic support for such a solution, there is no authority for the proposition that, in cases where a benefit has an objective market value, the Claimant should be entitled to invoke the Defendant’s subject willingness to pay a higher sum for the benefit as reason for valuing the benefit at a higher rate.’

Market value depends critically upon the identification of the relevant market and it is ‘specific to a given place at a given time’. As Lord Reed illustrated using the episode in Vanity Fair – Becky Sharp employing the panic of the British community in Brussels, selling horses prior to rumour of an impending attack by Napoleon (per Lord Reed paragraph 105); Becky obtained a price far in excess of ordinary value. Identification of the market you are in, is perhaps a little paradoxically, an important element in identifying ‘objective’ market value.

Save in exceptional circumstances, the principle of ‘subjective revaluation’ was not recognised; either for identifying a benefit, or for valuing a benefit received. Mr Sawaris made a late offer (i.e. after provision of Services by Mr Benedetti) of €75.1m to Mr Benedetti who he valued highly and wanted to be ‘generous’ to. This late offer, in the absence of contractual agreement, was not to be the high water mark for the enrichment – in addition to the €67 million Mr Benedetti already received for consultancy services.

What lessons can be learnt from the great case of Benedetti?

‘Value’ of consultancy should be governed by an agreement of the parties, by contract, otherwise the Court will have to determine market value – and strive for a measure of objective value. ‘Contract is King’ in all likelihood as Mr Howard, Counsel for Mr Benedetti said in discussion; but if you want to agree value for Services, agree a price.
There was a distinct theme that the Consultant in the case eluded all labels by which a measure for consultancy services could be fixed – was he an investment banker? No. A broker? No, probably not, too limited as a definition. A promoter? Too vague as a definition. This made it (in my view) all too easy for the Defendants to corral the Claimant into a (rough and ready) market rate and reduce the enrichment gained by Mr Sawaris to zero. The Supreme Court upheld judge’s conclusion as to ‘valuation by brokerage’; in the sum of €36.3m. (0.1 to 0.3% of the transaction value). In which case, in light of the fact that Mr Benedetti had already received €67m, he had already achieved, a quantum meruit, ‘as much as he deserved’.

The case (and the judgment of Lord Reed) can be found at:

Click to access UKSC_2011_0087_Judgment.pdf

The helpful Supreme Court Press Summary of the case can be found at:

Click to access UKSC_2011_0087_PressSummary.pdf

Judicial Review: R(on the Application of the HS2 Action Alliance Ltd (Appellant) v Secretary of State for Transport

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The Judgment expected this morning in the UK Supreme Court on the HS2 Action Alliance has rejected the HS2 Action Alliance appeal. The points of appeal are listed below. The administrative law procedure for judicial review permits parties in this significant case to challenge the reasonableness of the Government’s decision to go ahead with its plans for a high speed rail network; the challenge in this case appearing to be failure to consult during the environmental assessment process. A serious question was as to whether sufficient time has been allowed to assess environmental issues, including assessment by Members of Parliament; and thus parliamentary procedure would fail to meet the requirements of the environmental directive. This point of appeal also appears to have been rejected.

The Facts

The Secretary of State issued a Command paper titled ‘High Speed Rail: Investing in Britain’s Future—Decisions and Next Steps’ (DNS) setting out the government’s strategy for a new national high speed rail network called High Speed Two (HS2) from London to Birmingham, Manchester, and Leeds. The appellants contend that the Decisions and Next Steps (the ‘DNS’) paper is a ‘plan or program’ that is ‘required by administrative provisions’ and ‘sets the framework for development consent’ of HS2 and falls within articles 2 and 3 of Directive 2001/42/EC the Strategic Environmental Assessment Directive (the SEAD) as transposed by the Environmental Assessment of Plans and Programmes Regulations 2004. Justice Ouseley, found at first instance, that the consultation process in respect of the compensation decision was so unfair as to be unlawful. On all other grounds, however, he dismissed the claims, as did the Court of Appeal.

Main points of appeal:

1. Whether plans that may influence the Parliamentary consent process should be effectively excluded from the requirements of strategic environmental assessment by an unduly restrictive interpretation or application of the Strategic Envinronmental Assessment Directive (the SEAD); and contrary to EU environmental law.

2. Whether on the facts the Secretary of State’s ‘Decisions and Next Steps’ (DNS) paper would have a sufficient influence on Parliament to engage the SEAD (the Strategic Environmental Assessment Directive) and whether its very potential to influence Parliament is a compelling factor since, by the time the Bill process is underway, it will too late to challenge the decision in the DNS and provide proof of actual influence;

The writer has not followed the appeal closely, however the Case summary and Judgment issued this morning given its topicality and public importancea are linked below.

Press Summary:

Click to access UKSC_2013_0172_PressSummary.pdf

Judgment:

Click to access UKSC_2013_0172_Judgment.pdf

Volkswagen v Garcia: Academic publication and interaction with commercial interest

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Please find attached a link to an interesting short discussion of the Injunction case of Volkswagen v Garcia, heard in the Intellectual Property Enterprise Court before Justice Birss (formerly the Patents County Court) in June 2013, from the Lexology legal feed; illustrating that there are limits to freedom of academic publication when balanced against legitimate commercial interests. Further discussion of the Volkswagen injunction, involving UK academics will follow in a later blog.

http://www.lexology.com/library/detail.aspx?g=2d920b6d-6e18-42bd-b6db-6829e58fb71a&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2013-11-06&utm_term=