Commercial Disputes - What's New Jan 22?

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Commercial Disputes - What's New Jan 22?

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Wishing you all a Happy New Year and hope you had a relaxing festive break. This month’s update includes lessons from recent litigation concerning ‘cunningly concealed’ standard terms and a TUI package holiday that didn’t end very well.

Onerous and unusual terms cannot be buried in standard terms


Clauses within standard terms which impose burdensome obligations should be made obvious to the other party before the contract is agreed. The case below serves as a useful reminder that the obligation is even more important where standard terms are incorporated by reference, rather than being found in the signed contract itself.
 

Blu-Sky Solutions Limited (C) entered into a contract with Be Caring Limited (D) to provide connections for D’s 800 mobile phones under a mobile network service supplied by EE. D signed a purchase order form but cancelled the order shortly afterwards, before the connections had taken place. By signing the purchase order form, D acknowledged that it had accessed and read the standard terms and conditions (ST&C) on C’s website, when in reality it had not.

 

C commenced a claim alleging that it was entitled to an administration charge of £180,000 (£225 for each of the 800 connections) pursuant to a clause in its ST&C. D denied there was a contract or, in the alternative, that the clause raised by C was incorporated due to its unusual and onerous nature. The High Court grappled with the usual legal principle that a person who signs a document is bound by its terms, including those incorporated by reference (i.e. by reference to terms found on a party’s website), whether or not they had read them. The judge commented that the clause in question was “cunningly concealed in the middle of a dense thicket which none but the most dedicated could have been expected to discover and extricate…”

 

The Judge decided that the ST&C were incorporated into the contract, but that the specific clause relied upon by C to justify its claim was not incorporated (and in any event was void due to its penal nature). Where there are standard terms, a condition which is particularly onerous or unusual will not be incorporated into the contract unless the party relying on it has fairly and reasonably brought it to the other party’s attention. This decision suggests a distinction between including an onerous term in a contract signed by the parties, and including it from elsewhere in standard terms which are incorporated in the contract by reference. In the former case, the term is likely to have been adequately brought to the signing party’s notice without further ado (in all but extreme cases) but not in the latter case.

 

 

The Court isn’t obliged to accept uncontroverted expert evidence


In disputes requiring expert evidence it is generally considered a high-risk strategy for a party not to obtain its own expert report or to cross-examine the other party’s expert, because the court is likely to place reliance on the findings of an expert.
 
However, the case below shows that it remains possible for a court to reject the findings of the only expert. An opposing party may choose not to serve its own expert report nor to cross-examine the other party’s expert, and instead wait to challenge the findings in the expert's report for the first time in closing submissions at trial. It is perhaps only a relevant strategy where the claim value is small and where the cost of obtaining expert’s report would be disproportionate to the amount in dispute.

Mr Griffiths purchased an all inclusive package holiday in Turkey with TUI. Two days into the holiday, he began to suffer from a gastric illness. He had eaten all of his meals at the hotel, save for one meal in a local restaurant. He was admitted to hospital for three days and diagnosed with acute gastroenteritis. Mr Griffiths sued TUI and relied on a report from a consultant microbiologist which concluded that he had acquired his gastric illness following consumption of contaminated food or fluid from the hotel. TUI did not obtain its own expert’s report.

Initially the court dismissed Mr Griffiths’ claim but on appeal, the High Court reversed that decision and found in Mr Griffith’s favour. The High Court judge treated Mr Griffith’s expert’s report as "uncontroverted" evidence, because TUI had not produced its own expert evidence to challenge it, and did not cross-examine Mr Griffith’s expert. The judge suggested that where an expert’s report was uncontroverted, the court was not entitled to subject it to the same kind of analysis and critique as if it were evaluating a controverted report. In other words, the court was bound to simply rubberstamp the findings in an unchallenged expert’s report.

TUI appealed the decision to the Court of Appeal, which considered the question of whether, and if so, in what circumstances, the court can reject an "uncontroverted" expert's report. The court decided in TUI’s favour. In its judgment the Court of Appeal held that there is no strict rule that prevents a judge from questioning the content of an uncontroverted expert's report. Provided the challenge does not question the credibility of the expert, the Court of Appeal confirmed that a party can fairly seek to query the findings in an uncontroverted expert’s report for the first time in submissions at trial - and that an uncontroverted report can fairly be rejected by the judge.
 


Do you have a new or ongoing commercial dispute?


We hope you found the above cases interesting. If you have any further questions or comments or need advice on a new or ongoing commercial dispute please contact William Angas, Gail MorrisJustin McConville, Ben Ashworth or Laura Sutton

The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. PDT Solicitors LLP accepts no responsibility for the content of any third party website to which this webpage refers.

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