IES Utilities Group Limited v British Telecommunications PLC [2024] EWHC 3417 (TCC)
Facts
- The parties entered into a BT standard form contract;
- The Defendant attempted to terminate the contract between the parties in 2024;
- The Claimant initiated adjudication proceedings against the Defendant, alleging that the termination was a repudiatory breach;
- The adjudicator found against the Claimant and ordered the Claimant should pay the adjudicator’s costs;
- The Claimant, subsequently, made a Part 8 claim against the Defendant. In its claim form, the Claimant broadly claimed the following:
- How the contract should be interpreted with regards to the work carried out by the Defendant and the remuneration to be paid by the Claimant;
- If the Defendant repudiated the contract on or around 13 July 2023 by attempting to terminate the contract;
- The Claimant is entitled to damages as a result of the repudiation.
- The Judge, after hearing submissions from the Defendant, also believed that further matters needed to be addressed, namely:
- If the conduct and operation of the contract from the beginning of the contract to 13 July 2024 demonstrated that the Defendant behaved in a way that was repudiatory;
- If the Claimant accepted the repudiation and terminated the contract.
- The Claimant did not provide anything to evidence and substantiate its claim with the Claim form. The Defendant argued that the evidence provided during the adjudication (including witness statements from the Claimant) should be admitted as evidence in the Court claim.
- The Defendant argued that, as the form of contract was a standard form (which had been used on many occasions), it would be better for a Part 7 claim to be made. This would allow the Court to properly understand the pleaded case and defence and carry out an analysis of each party’s pleadings on how the contract should be interpreted.
Judgment
- The Judge found that the evidence used by the Claimant during the adjudication should be adduced for the Court proceedings;
- The Judge also held that the declarations the Court was being asked to consider and find would inevitably lead to disputes relating to the facts of the case;
- The Judge stated that the Court should be cautious when reviewing whether or not a matter should continue as a Part 8 claim and avoid simply finding that this sort of claim only relates to contract interpretation and no other factual findings need to be made. The Judge also said the Courts should avoid “sanctioning an abuse of Part 8 proceedings”;
- The Judge held that this matter should be heard as a Part 7 claim and the claim and defence should be properly pleaded;
- The Judge stated that the claim was substantial, the Claimant did not attempt to agree with the Defendant if Part 8 was appropriate and the Judge believed that the claim was effectively a simple re-do of the adjudication claim was not a useful argument for the Claimant (as this demonstrated it would need to have proper evidence, etc.);
- As a result, the Judge directed that the case should proceed as a Part 7 claim.
Points to consider as a result of this case
- If you believe you want to issue a Part 8 claim, instead of Part 7, then you should consider how simple the legal point is you want resolving. If it is likely that the point you want resolving only relates to clarifying a term of a contract or a point that does not rely factual evidence, then Part 8 may be appropriate for your claim. If your claim will involve detailed legal arguments and factual evidence (including disclosure of documents and attestation by witnesses) then Part 8 will not be appropriate;
- You may believe you are saving costs by issuing Part 8 proceedings. However, if those proceedings are challenged, like in this case, then you will ultimately spend more cost defending the application and you risk the Court finding that you should proceed with Part 7 regardless, so you may risk wasting costs; and
- This matter should be carefully discussed with your legal team, including your solicitor and Counsel, and an informed decision should be made.
Grain Communications Limited v Shepherd Groundworks Limited [2024] EWHC 3067 (TCC)
Facts
- The parties entered into a framework agreement on 20 January 2022 in relation to the Defendant providing duct laying, joint chamber and toby box construction and other works in the North East of England. The agreement allowed the Claimant to instruct the Defendant to carry out works in different areas if a work order was placed by the Claimant;
- Clause 11 of the frame work agreement allowed the Claimant to instruct variations. In accordance with clause 8, the Defendant was meant to notify the Claimant of any delays to its work as a result of the variation.
- On or around 7 September 2023, the Claimant provided a work order to the Defendant to carry out work on ‘Blyth Phase 3’ in Northumberland;
- On 24 October 2023, the Claimant sent an email to the Defendant, informing the Defendant that they could not continue to carry out the work on Blyth Phase 3 (and at two projects in Newcastle and 1 in Wallsend) at that time;
- An adjudication was issued in relation to the 24 October 2023 email. The adjudicator determined that the email was not a variation but a cancellation of the Blyth Phase 3 work order. The adjudicator’s reasoning was that a reasonable person reviewing the email would not consider the email a variation but rather a cancellation of the works.
Judgment
- In relation to the 24 October 2023 email. The Judge accepted that the email did not specifically state it was a variation. However, the Judge decided that the Claimant was allowed to omit work within the definition of ‘variation’ in the framework agreement. The 24 October 2023 email also referred to the fact that the Claimant did intend to continue the Blyth Phase 3 project, just not at that moment in time. As a result, even if the email did not state it was a variation, the Claimant had instructed a variation under the agreement;
- The Judge did not accept an argument from the Defendant that the parties had agreed an implied term that did not allow the Claimant to postpone the work instructed. The reason why was this would contradict the terms expressly provided for in the agreement. The Judge also heard testimony that allowing the Claimant, if necessary, to delay the start to a work order was necessary as the delay would not necessarily be within the Claimant’s control (e.g., if the local authority delayed in granting a permit to work on the site); and
- The Judge also held that the Defendant was not entitled to recover its loss of profit because of a clause in the agreement that stated the Defendant was only owed amounts ““properly due… in connection with the carrying out of the works in connection with the termination of this Work Order” and, as the Claimant had not necessarily deprived the Defendant of its ability to carry out this work, this clause was not applicable.
KH Retail Limited, C-Retail Limited, Supergroup Internet Limited, Superdry Plc v City Football Group Limited [2024] EWHC 3231
Introduction and Background
Since the Civil Procedure Rules (CPRs) were introduced in 1999, there has been an active push by the Courts to encourage parties to resolve their disputes in accordance with the Overriding Objective. That is, as far as is practicable, to deal with cases justly and at a proportionate cost. To this end, the courts have wide case management powers. This can involve actively encouraging parties to resolve their disputes out of court.
One popular method of Alternative Dispute Resolution (ADR) is mediation, which offers benefits such as lower costs, informality and procedural flexibility. Historically, however, courts could not compel unwilling parties to mediate. This was seen in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, where Dyson LJ held that although the Courts could strongly encourage mediation, they must not deny the parties access to the courts due to their refusal to mediate.
Recent jurisprudence reflects a departure from this view. In Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416, the Court of Appeal held that the Court has the power to stay proceedings in order for the parties to mediate. This development was soon reflected in amendments to the CPR, specifically CPR 1.1(f), which now allows the court to further the overriding objective by “promoting or using alternative dispute resolution”.
Facts
The claim arose from a copyright dispute between Superdry Plc (a well-known national clothing retailer) and City Football Group (operator of Manchester City Football Club’s commercial arm). The dispute centred on the use of the words “super” and “dry” in an advertisement for “Asahi Super Dry” (a beer), which the claimants argued infringed on their “Superdry” trademark.
The claimants sought to mediate in order to attempt to resolve the dispute and made an application to the Court to order compulsory mediation, which was heard at the Pre-Trial Review. They asserted that the matter was not particularly complex and also, that engaging in ADR could mean incurring substantially less costs in the long run. They relied on the aforementioned Churchill decision as well as the recent amendments to the CPR to argue that the Court had the power to order a mediation and that they should exercise in these circumstances.
The Defendant did not dispute that the Court had the power to order mediation but they opposed the grant of a stay of proceedings to facilitate mediation. They did however, submit the Court should only make such an order, where there was a “reasonable chance of success”. They also submitted that both parties really wanted a judicial determination of the key issues in dispute, and that a stay and a mediation would delay this.
Judgement
The Court ruled in favour of the claimants and granted a stay of proceedings in order to allow for a mediation. They even said that the parties should report the outcome to the Court at any future hearings. This confirmed the Courts newly realised case management powers as set out in Churchill and the CPR.
The Court said that the parties right to judicial determination does not extend to unjustifiably avoiding ADR. They also said that this was a case where mediation was particularly suitable, for reasons such as it not being too complex and that there was scope to narrow the issues in dispute and reduce costs.
The Court ordered a 21 day stay to allow the parties to mediate. In this case, the parties would soon inform the Court that they had in fact, reached a settlement.
