SQE1 part 1 Flashcards
1
Q
5 factors necessary for a valid contract
A
- intention to create legal relations
- certainty of terms
- agreement (offer and acceptance)
- consideration by each party
- capacity
2
Q
offer definition
A
- an expression of willingness to contract
- on specified terms made with the intention (Actual or apparent)
- that it is to become binding as soon as it is accepted by the person to whom it is addressed
3
Q
bilateral offers
A
- both parties have legally binding obligations
- eg Connor offers to buy books from Kate for £10
4
Q
unilateral offers
A
- only one party assumes legal obligations
- carlill v carbolic smokeable co
5
Q
express offers
A
offeror explicitly makes the offer
6
Q
implied offers
A
- offeror makes their offer non-verbally
- takes clothes to the till
7
Q
invitation to treat
A
may make an offer
- willingness to commence negotiations
8
Q
Gibson v Manchester City council
A
- council said it may be prepared to sell the house to you for £2180
- claimant queried price but later tried to go ahead
- council had stopped selling by this time
- court found it was an ITT because of use of may and letter said it was not a firm offer
9
Q
communicating an offer
A
- offer needs to be communicated to be effective
- offeree cannot be bound by an offer they’re not aware of
- but offeror can elect to be bound by an offer they aren’t aware of by explicitly confirming it
10
Q
how long does an offer last?
A
- specified period of time
- failure of a precondition
- reasonable length of time
- destruction by a counter-offer
-death of the offeror or offeree
11
Q
destruction by counter offer- Hyde v wrench
A
- def offered to sell a farm to c for 1000
- c offered to buy for 950 instead
- c later wanted to proceed for 1000 but seller refused
- def won, the offer had been a counter offer and had destroyed the original offer
12
Q
general rule for acceptance
A
- must be communicated
- acceptance takes place on communication to the offeror- entores v miles
13
Q
silence as acceptance?
A
silence cannot amount to acceptance unless it is absolutely clear that acceptance was intended
14
Q
postal rule
A
- once acceptance letter is sent in the post, the acceptance is deemed to have happened.
- regardless of whether the letter is lost or doesnt reach the offeror
- can be negated by explicit inclusion as a contractual term- eg need it in writing
15
Q
is acceptance by someone else valid?
A
- no, if the offer is addressed to only one person, they are the only person that can accept the offer
16
Q
battle of the forms
A
- can be tricky to pinpoint when an offer was made and accepted during long negotiations
- the last shot wins
- each issue of terms is treated as a counter offer, which replaces the preceding offer
- however there is an exception to this if it is clear that neither T&C’s were agreed
17
Q
4 rules on consideration
A
- must not be past
- must be sufficient but doesn’t need to be adequate
- must be of economic value
- can be a promise not to sue
18
Q
performance of existing duties as consideration?
A
- where a person promised to do what he is already bound to do under a contract or in law- this is not consideration because there is no element of exchange
- however, going above and beyond the performance of duties imposed is consideration
- a promise to pay less under an existing contract isn’t consideration unless it is paid before it is due or in a different place- provided this was made at creditors request
19
Q
promissory estoppel
A
- a way of making promises legally binding without consideration
- stops the promisor going back on their promise not to enforce their rights under the contract
- where there is variation of contract and consideration cannot be identified, the next step is to explore whether promissory estoppel applies
20
Q
4 requirements for promissory estoppel to apply
A
- there must be a clear and unambiguous promise from the promisor that they will not enforce their rights under the contract
- there must be a variation of contracts and not formation of contract
- the person to whom the promise is given must have relied on the promise
- it must be unfair for the promisor to go back on his promise
21
Q
limitations to PE
A
- it can only be used as a defence
- must be a promise to waive legal rights
- must have relied on the promise but not necessarily to his detriment
- must be unfair for the promisor to go back on the promise
- is an equitable doctrine so a party must have clean hands
22
Q
I2CLR? domestic vs commercial
A
- objective test
- domestic- general assumption is no i2clr- this is rebuttable though
- commercial- general assumption is there is an i2clr- also rebuttable
23
Q
commercial agreements- evidence to rebut presumption that there is i2clr
A
- clear words that there is no intention to have legal effect
- uncertainty in the agreed terms
24
Q
domestic agreements- evidence to rebut presumption there is no i2clr
A
- express agreement
- the agreement is serious
- one party relied on agreement to detriment
25
certainty
an agreement is not binding if
- it is too vague -eg "west end salary" what does that mean??
- it is incomplete
26
too vague agreements- methods used by court to find certainty
- resolution mechanism within the contract
- reasonableness
- previous course of dealings
- officious bystander
- custom
- terms implied by statute
27
capacity- 3 main cats of people whose ability to enter into contracts is limited by law
- minors
-- 2 exceptions
-- contracts that are automatically binding
-- contracts where the minor has a choice of whether or not to be bound by it
- mental incapacity- poor language skills or illiteracy are not sufficient to demonstrate incapacity- should get it read to you etc
- under the influence- if made while drunk, the contract is valid, unless the person was too drunk to understand the nature of the transaction and the other party knew this - contract is likely to be voidable
- if one party lacks capacity but the other doesn't realise this, the incapacity is ignored
28
void contract vs voidable definitions
void
- contract is treated as if it never existed
- parties cannot decide whether contract should continue to exist or not
voidable
- contract can continue to exist but can be destroyed
- destroyed when a party chooses for it to do so
- if this is voided after obligations are incurred or money is paid this can be difficult- party would probably be liable for debts incurred before contract voided
29
term or representation? definitions
term
- a promise or undertaking that comprises part of the contract itself
- untrue term= breach of contract
representation
- a statement that may have encouraged a party to make the contract but is not itself part of the contract
- untrue representation= can be sued for as such ie outside of the contract itself
is it a term or rep?- depends on the parties intentions and if it is intended to be a term, the court will stick with that
30
are these a term or representation?
- importance of statement
- special knowledge/skill
- timing of the statement
- agreement in writing
- strength of inducement
I- if party makes it clear that the statement is essential to them entering into the contract, it will likely be a term
s- term if person saying it has special knowledge
t- if long time elapsed between the statement and the signing, it is not a term- unless it is really important
a- term
s- if advised to look into truth of statement- not a term
31
parol evidence rule
- generally extrinsic evidence is not admissible in court if not written in contract
- includes oral statements and other written materials
- logic is that the party would go to the effort of including all the important things if they've made the effort to write the contract
- only applies to disputes about the terms of a contract, not applicable when proving whether a contract is valid or not
32
rebuttals to the parole evidence rule
- implied terms
- evidence about the parties
- custom
- operation of the contract
- partially written agreements
- rectification
33
oral vs written statements?
- if the written contract is different to the oral statement, the written contract wins
- if there is an oral promise and a written contract, but the written contract doesnt mention the subject matter of the promise, then you can claim damages for the oral promise
34
4 ways terms can be implied
- terms implied by fact
- terms implied by law
- terms implied by custom
- terms implied by trade usage
35
conditions vs warranties vs innominate terms
conditions
- clearly important term
- breach would result in very sig consequences for the innocent party
- breach results in the option for the innocent party to repudiate the contract
warranties
- usually means a term that is broken without very important consequences
- if breached, a party can sue for damages but not rescind/terminate the contract
innominate terms
- terms that can be broken with either important or trivial consequences, depending on the nature of the breach
- if consequences are serious= condition
- if minor= warranty
36
unfair contract terms- exclusion and limitation clauses
these clauses aim to limit a party's liability for a breach of contract
- exclusion- attempts to exclude ALL liability for breach
- limitation- attempts to limit liability to a certain amount
37
what does contra proferentem mean?
- translates as "against the draftsman"- any ambiguous terms are interpreted by courts in a way that is the least favourable to the interests of the party who drafted it
38
overview of the UNFAIR CONTRACT TERMS ACT 1977
- basic purpose is to control the use of exclusion/limitation clauses in non-consumer contracts
- does not apply to contracts for the sale of land, intellectual property, or the formation or dissolution of a company, or employment contracts
- you cant exclude liability for negligence causing death or PI
- fair and reasonable
39
CONSUMER RIGHTS ACT 2015
says goods must be as described, fit for purpose and of satisfactory quality
40
what are vitiating factors? and examples
- different circs that make a contract invalid
- if any factors are identified then the contract could be rendered void or voidable
- misrep
- mistake
- duress
- undue influence
- illegality
41
misrepresentation
- an untrue statement by one party that convinces another to enter a contract
to be actionable the statement must be-
- a statement of fact
- untrue statement
- the statement induced the other party
42
3 types of misrepresentation
fraudulent
- false statement intended to deceive
- can be reckless
negligent
- statement made carelessly
- misrepresenter to pay damages where the belief in the statement was honestly held but not held on reasonable grounds
innocent
- providing that misrepresentor can establish they had reasonable grounds to believe that their statement was true they are not negligent
- damages not available but the representee may be able to rescind the contract
- the effect of any misrep is to make the contract voidable- can either affirm it or rescind it
43
What is recission of a contract?
- recission is the mutual restoration of all benefits received in order to place both parties to pre contract position
- it is an equitable benefit and is at the discretion at the court
44
bars to recission (misrep)
- affirmation- innocent party discovered the misrep but decided to keep contract going
- undue delay
- an innocent purchaser has acquired an interest in the subject matter of the contract before the purported recission of the contract
- where it is impossible to substantially restore the goods or property
45
mistake- void or voidable?
- void
46
types of mistake
- common mistake -- both parties have made the same mistake as to a term of the contract
- unilateral mistake- one party is mistaken as to a term of the contract and the other party should know this
- cross purpose mistake-- no agreement as the parties are at cross purpose- impossible to resolve the ambiguity of what was agreed
47
2 types of illegality in contract
- illegality at common law- eg against the law- restraint of trade or contrary to public policy or morality
- illegality under statute- eg against statute
48
remedies for duress and undue influence
- the only remedy is recission
- contract as a result of duress and undue influence will be voidable
same bars to recission as misrep
49
what is duress? (contract)
- duress is illegitimate pressure by actions or threats of action to make a person agree to something
- factors considered by the court to determine illegitimate pressure
factors considered to determine illegitimate pressure
- actual or threatened breach of contract
- threat was made in good or bad faith
- victim protested at the time
50
types of undue influence
- actual- must prove that you did not enter the contract of your own free will
- presumed- relationship of trust and confidence & where the transaction calls for explanation
51
4 ways to discharge a contract
- by performance
- by agreement
- by frustration
- by breach
52
the following need to apply for frustration to happen
- government intervention
- crucial person not available
- illegality
- destruction of the contractual subject matter
- non-occurrence of a fundamental event
all involve a question of degree
53
entire obligation rule definition and advantages
- one party has to fulfil all of their obligations before the other party is required to perform theirs
advantages
- commercial contracts typically provide for instalment payments- limits relevance of this rule
- benefits consumers- withholding payment from those who do not complete obligations- ensures proper performance
54
damages for contractual breaches
- money
- common law remedy so available as of right
- aim to assist the claimant and not punish defendant
- assessed by the claimants actual loss caused by the breach
- no loss = nominal damages only
55
types of losses (for contract damages)
- expectation (loss of profits)
- reliance (losses already incurred- wasted expenses)
- restitutionary (recovering payment already made)
56
limitations to awards for damages (contract)
- remoteness -- reasonable foreseeability is the standard of whether losses are recoverable or too remote
- When determining reasonable foreseeability, courts consider:
- The parties' understanding: What the parties understood when the contract was made
T- he knowledge of the parties: What the parties knew at the time of the contract, or at least the party who breached the contract
- The directness of the damages: Whether the damages were a direct and obvious result of the breach
- duty of mitigation
- claimant must act reasonably to limit or reduce loss caused by defendant's breach
57
specific performance
- equitable remedy
- at courts discretion
- compels def to perform contract
- quite rare and only where constant superintendence isn't required by court (they dont have to oversee it )
58
Core requirements of negligence in tort
- duty of care
- breach of duty
- causation
59
established DoC situations
- road users
- dr patient
- employer employee
- manufacturer consumer
- teacher pupil
- can only be relied upon by claimants when they have suffered PHYSICAL DAMAGE
60
establishing DoC in novel cases
2 ways
- incrementally and by analogy- court compares to any other precedents
- caparo test
-- 1. reasonable foresight of harm
-- 2. sufficient proximity of relationship between C and D
-- 3. fair just and reasonable to impose duty - need to think about floodgate argument and public benefit
61
duty of care- omissions
- general rule is no DoC for omissions
- exceptions
-- duty not to make things worse
-- if there is a special relationship/control
- when D creates a dangerous situation
62
breach of DoC- tort- 2 stage test
- how the D ought to have behaved (ie the standard of care they should have exercised)
- the court then decides if Ds conduct fell below that standard
63
standard of care definition tort
- reasonable man
- objective test
-e.g. if D is a golfer, it is the reasonable golfer
- an ordinary person does not take precautions against every risk
64
exceptions to the normal standard of care tort
- skilled defendant- must meet the standard of their profession
- nettleship v Weston- DoC held by learner driver was the same as every other driver
- children- adjusted to age- e.g. reasonable 15 year old- apart from if they are engaged in a dangerous adult activity at the time of the wrongdoing
65
how to calculate the degree of care to be expected of a reasonable person
- size of the risk- how likely?
- how serious the harm would be if the risk materialised
- utility of Ds conduct (value to society of Ds activities- if their behaviour is in public interest, D is less likely to be held liable)
- cost of taking precautions- big expense for small reduction of risk= less likely to be held liable
66
degree of care
- common practice
- current state of knowledge
- res ipsa loquitur
- if they complied with accepted practice of their trade they're less likely to be guilty
- Ds actions are judged by the standard of current knowledge- dont look at 1947 accident with 1954 spectacles
- thing speaks for itself- some circs where the damage occurred is such that a court may be prepared to draw an inference of neg without hearing evidence of what d did or didn't do
67
criminal convictions and tort?
- if someone is convicted in criminal court for something, it can act as evidence in civil
- if someone is found not guilty in criminal court this doesn't mean anything as criminal standard of proof is higher
68
pure psychiatric harm- duty of care
- psych harm suffered without physical impact
- 2 tests- primary victim or secondary victim
69
primary victim- psych harm
- actually in danger OR believed they were in danger
- primary victims owed DoC for psych harm provided the risk of physical injury was foreseeable
- not necessary for the risk of psych harm to be foreseeable
- doesnt count if you're hyper sensitive
70
secondary victims- pure psych harm conditions for DoC
- foreseeability of psych harm (would a person of normal fortitude suffer psych illness from this- HAS TO BE A RECOGNISED ILLNESS)
- remoteness of damage (DoC, Breach, causation)
- proximity of relationship (close relationship of love and affection)
- proximity in time and space- present at accident or immediate aftermath
- proximity of perception- must see or hear the accident or immediate aftermath with own senses
71
destruction of property and psych illness- tort
- claimant could recover damages for psych illness following witnessing the destruction of their property
- still need to prove causation and reasonable foreseeability
72
psych harm- tort
- future disease
- involuntary involvement
- shock caused when D endangers themselves
- assumption of responsibility
- damages for anxiety related to the potential risk of a future disease are not recoverable
- in order for this claim to be successful there has to be a reasonably held belief that the C had been involuntarily involved in anothers death or injury
- no DoC not to shock them by injuring yourself- would open up a lot of litigation
- some relationships have a duty to not expose people to reasonably foreseeable psych harm- employer/doctor/police and informant
73
Pure economic loss general rule
- D doesnt owe a DoC not to cause pure economic loss
74
Economic loss- defective property
- no DoC owed if PEL caused by acquiring a defective item of property
75
PEL- spartan steel- THE ONLY EXCEPTION THAT PEL IS NON RECOVERABLE- apart from negligent misstatements
- can't recover for future losses
- can recover for property he did own and the products ruined by the power cut
-BECAUSE THE THING THAT CAUSED THE BREAKAGE WAS OWNED BY A THIRD PARTY
76
PEL- negligent misstatements- test of DoC
1. The Defendant knew the purpose for which the advice required
* 2. The Defendant knew that the advice would be communicated to the
Claimant (either specifically or as a member of an ascertainable class of
persons)
* 3. The Defendant knew the Claimant was likely to act on the advice without
independent inquiry
* 4. The advice was acted on by the Claimant to their detriment
- counts if agent makes the misstatement if it is within their scope of authority
- less reliable if in a social situation
77
PEL- exclusion of liability
- cant exclude for PI or death
- disclaimer needs to be reasonable and fair but could disclaim liability for negligent acts
- were the parties of equal bargaining power?
- could they have got advice?
78
defences in tort
- volenti
- ex turpi
- cont neg
- necessity
when D raises a defence, the burden of proof shifts to them
79
volenti
- consent
- complete defence
need to establish
- c had full knowledge of the nature and extent of the risk (subjective. test) and
- c willingly consented to accept the risk of being injured due to ds negligence
80
when does volenti apply
- doesn't apply to motor vehicles
- in practice, few cases are likely to satisfy volenti- much more likely to get cont neg
- employee/employer- volenti unlikely to be satisfied
- rescuer- not necessarily voluntary- moral duty
- sporting- no consent to injury
81
ex turpi- illegality
- if c is involved in an illegal enterprise at the time of injury, this may provide d with a defence
- trivial offending doesnt suffice- eg not wearing seatbelt
82
cont neg
- partial defence
comprises 2 elements
- carelessness by c
- that carelessness contributed to c's damage
- test is whether c has failed to take reasonable care for their own safety
damages are reduced to the extent that the court deems fair
seatbelt
- if would avoid injury = -25%
- if would lessen injury = -15%
- applies to kids too
83
cont neg
- parents of kids
- rescuers
- employees
- kids damages aren't reduced for cont neg of parents
- only cont neg if they show complete disregard for their own safety
- diff degree of care needed by employees of a mine etc
84
public necessity- tort- defence
- eg pulling down a house that is on fire to prevent the spread
- cant be used if the circs giving rise to necessity are the d's own making
85
employers common law duty
- reasonable care for their employees safety whilst at work
- duty of care so c has to show breach
86
4 duties for employers- tort
- competent staff
- adequate material
- proper system of work and supervision
- safe place of work
87
vicarious liability
- principle under which a person is liable for the torts committed by another
- under this principle, it is not a requirement that the employer has committed a tort themselves, but their liability is a form of secondary liability in that it derives from a tort committed by their employee
- they are liable in addition to (not instead of) their employee- joint liability
88
requirements for vicarious liability
- worker must be an employee (or in a relationship akin to employment)
- employee must have committed a tort
- employee's tort must have been committed in the course of employment
89
acts expressly prohibited by employer- vicarious liability
- acts done in contravention of a prohibition from an employer will not necessarily fall outside of 'course of employment'
- if it is done to further the employers business it is likely to be seen as vicarious
- not likely to be vicariously liable of an intentional
90
"frolic of ones own"- employers liability
- if acting outside the course of employment
- 2 issues
- geographical divergence
- departure from the task set
- the greater the degree of departure from either of these- more likely it is that they're deemed to be on a frolic of ones own
91
occupiers liability act 1957- how to fall within this
need to
- establish that they have suffered loss due to the state of the premises
- identify occupier
- prove they're a visitor
- establish the occupier failed to take reasonable care for their safety
92
who is an occupier?
- someone with a sufficient degree of control over the premises
93
who is a visitor?
- people who have express or implied permission to be on the occupiers land
- the onus of proving implied permission rests upon the person claiming it exists
- child visitors need a higher degree of care - parental responsibility can reduce this
-skilled visitors are expected to appreciate and guard against risks
94
warning notices and consent - occupiers liability
- adequate warning may mean the occupier has complied with their common DoC
- warning must be adequate
consent
- principles of volenti apply
- claimant must know of the precise risk that causes the injury and show by their conduct that they willingly accepted this
95
CIVIL PROCEDURE RULES overriding objective
- all cases must be conducted justly, fairly, expeditiously and proportionately
- there is a fundamental expectation that parties will attempt to settle/enter into an alternative dispute resolution (ADR) process
96
pre-action protocols (PAPs)
- indicate what steps of best practice are expected to be taken before litigation in certain types of cases
- not all care types have these
97
LITIGANTS IN PERSON (LIPs)
- LIPs are people that represent themselves
- they should be treated in a way that redresses the disadvantage of dealing with a legal system designed for legal representatives
98
vulnerable parties/witnesses
vulnerable- where a factor may adversely affect their participation in proceedings or the giving of evidence
- court should establish vulnerability early and then establish ground rules
99
issuing- which court to issue in?
- county court or high court?
HIGH COURT
- MUST BE OVER £100,000 OR MORE (eg clin neg)
- UNLESS PI WHICH IS £50,000 OR MORE
100
high court or county court when you have the option
high court
- the financial value of the claim and the amount in dispute
- the complexity of the facts, legal issues, remedies or procedures involved
- the importance of the outcome of the claim to the public in general
county court
- certain consumer credit act 2006 claims
- applications for certain types of injunction
- part 8 claims
101
divisions of the high court
- chancery
- family
- kings bench
within the chancery
- business disputes
- professional negligence
specialist area
- patents
- intellectual property
within the kings bench
- breach of contract
- negligence
- PI
- non-payment of debts
specialist area
- admiralty
- commercial
- tech and construction
102
costs negotiation
- if the sum of costs a party is liable for cannot be agreed then a formal procedure for assessment of the same must be undertaken
103
costs negotiation- summary assessment- what and when?
occurs on one of two occasions
- at the end of an interim application
- at the end of a one-day fast track trial
104
summary assessment costs procedure
- process is intended to be brief and doesnt involve a lengthy consideration of each item claimed
- once assessed the costs are usually payable within 14 days
- parties submit to court details of their costs in form n260- must be signed by a fee earner confirming that the indemnity principle hasn't been breached
- must be filed at least 24 hours before the interm application hearing OR
- 2 days before a fast track trial
- if you are late the court will take this into account but it won't be a bar to total recovery
- no fee is payable
105
detailed assessment of costs - what and when?
- involves a detailed exam of a party's costs in a separate action after conclusion of the main action
- at the end of a trial, the court is permitted to order the paying party to pay an interim as against the receiving party's costs
106
detailed assessment costs- pre-formal procedure
- draft a bill of costs (which sets out a chronological list of the steps undertaken int he case with a summary of the work undertaken)
- if budgeted a phased bill of costs is needed
- negotiation is attempted
- part 36 applies to costs offers
107
two possible ways of proceeding to detailed assessment- case value
- detailed assessment hearing for cases above 75k
- provisional assessment on paper for cases below 75k
108
detailed assessment- costs- procedure
- applies to all case values
- in order to commence costs proceedings you serve:
-- notice of commencement (N252)
-- Bill of costs
-- disbursement vouchers
- these are only served and not filed at court
- no fee payable at this stage
- once served the paying party files Points of Dispute within 21 days
- this period can be extended by agreement
- the Points of Dispute set out the parts agreed and disputed and should be concise
- receiving party may file replies to the points of dispute within 21 days of service of the POD - this is optional
109
detailed assessment- detailed costs certificate
- if the paying party fails to serve their points of dispute then the receiving party can file at court Form n254 request for a default costs certificate
- court will then issue the default costs certificate upon form N255
- the sum will include interest and must be paid within 14 days
- can be set aside if there is a good reason to do so
110
if costs are agreed during the detailed assessment process..
- matters are concluded with a consent order
- court fee of 108 is payable
111
paper based- provisional assessment- details
* The assessment will take place once the documents have been filed
* You also need to file a sealed envelope marked “Part 36s and/or similar
offers”. This envelope contains copies of all such offers
* The Court try and assess costs within 6 weeks of filing
* Once assessed the Court returns the Bill of Costs with the Court’s decision
noted thereon
* The parties then agree the total sum due based upon the Court’s decisions
* Either party can challenge the provisional assessment by requesting an oral
hearing within 21 days of the return of the annotated Points of Dispute.
112
detailed assessment time limits
-time limit to commence this is 3 months after the judgement/order giving entitlement to costs
- extensions can be agreed by court
- if deadline missed- 2 possible sanctions
- may disallow some/all interest
- may disallow some/all receiving party's costs
113
pre-issue settlement
- if the case settles pre-issue and costs cant be agreed then the receiving party issues part 8 proceedings
- once served, this means the usual detailed assessment procedure can be followed
114
definition of legal costs
- profit costs
- VAT
- disbursements
- success fee
- insurance (ATE)
115
two fundamental principles of costs
- payment of costs by one party to the other is at the discretion of the court
-- should take into account
-- conduct of parties
-- whether a party has succeeded on part of its case (even if whole case wasn't successful)
-- any offers (not part 36s)
- loser should pay winners costs
- however this has changed slightly with the introduction of QOCS
116
QOCS- WHAT IS IT?
- applicable in all PI cases (and clinical neg) no matter when the accident occurred
- THE CLAIMANT WILL NOT HAVE TO PAY THE DEFENDANTS COSTS IF THE CLAIM FAILS BUT THE DEFENDANT WILL HAVE TO PAY THE CLAIMANTS COSTS IF THE CLAIM SUCCEEDS
- potentially reduces the need to purchase ATE
117
exceptions to QOCS
Where the claim is found to be
fundamentally dishonest
* Where the claim is for the financial
benefit of another (e.g. credit hire)
* Where the claim has been struck out
* Where the claim discloses no
reasonable cause of action
* Where the claim is an abuse of the
Court's process
* Part 36s
118
indemnity principle
- the winning party cannot recover more costs from their opponent than he has paid to his legal rep
119
2 bases of assessment of costs
- standard basis
-- only proportionate costs are allowed
-- any doubt is resolved in the paying partys favour
- indemnity basis
-- proportionality is not taken into account
-- any doubt is resolved in the receiving party's favour
- costs need to be reasonably incurred
- standard basis is norm unless the court feels there has been some culpable behaviour on the part of the other party
120
factors considered for a wasted costs order
- Legal rep must have acted improperly, unreasonably, or negligently
- their conduct must have caused a party to incur unnecessary costs
- it must be just to make the order
courts discretion follows a two-stage formula
-- whether on the evidence of the applicant alone, a wasted costs order is likely
AND
-- whether such a costs order is justified notwithstanding the cost involved
burden rests with the applicant
121
non-party costs orders- process to the application
- the non party must be added as a party to the proceedings for the purposes of costs only
- the non-party must be given an opportunity to attend a hearing at which the court will consider the matter further
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budgeting- costs
- the budget is on form Precedent H
- the budget discussion report is on form Precedent R
- litigant in person is not required to prepare a budget
- unless the court otherwise orders, any party that fails to file a budget will be treated as having filed a budget comprising only the applicable court fees
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the key features to note about costs and funding
* The need to provide the best possible information on
costs and funding at the outset and throughout the claim
* The need to review costs regularly and provide written
updates (not just in relation to the amount of costs but
the likelihood of the recoverability of the same)
* Changes of rates due to firm increases or changes in
handlers
* Changes in strategy that may impact upon the costs
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methods of funding dispute res
- BTE (before the event) insurance- if this runs out you may have to purchase ATE to top it up
- privately
- union funding
- public funding (legal aid)
- conditional fee agreements (CFAs)
- ATE (after the event) insurance
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Conditional Fee Agreements- success fee
- In PI cases
- the success fee (inc VAT) can be up to 100% but is limited to 25% (inc VAT) of the sum recovered for damages (exc future financial losses and interest) and net of any state benefits received by the client
- in all other cases
- success fee can be no more than 100% of the legal rep's fees AND is not capped
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what do you have to advise the client on when talking about CFAs
* The CFA must be in writing
* The Success Fee is not recoverable from
the opponent
* The maximum amount of the Success Fee
i.e. 100% subject to a cap based upon
damages recovered
* Explain when they may be liable for their
own or the opponent’s costs
* Their right to have any costs you claim from
the client assessed
* Disclose any interest in the funding policy
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% shareholding and powers
100%
Control of the company
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% shareholding and powers
75%
Can pass a special resolution
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% shareholding and powers
50%
Can block an ordinary resolution
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% shareholding and powers
More than 50%
Can pass an ordinary resolution
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% shareholding and powers
More than 25%
Can block a special resolution
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% shareholding and powers
Majority in number holding at least 90% of the voting shares
Can consent to short notice of a GM
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% shareholding and powers
Any two voting members or any members holding at least 10% of the voting shares
Can demand a poll vote
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% shareholding and powers
More than 10%
May refuse consent to short notice of a GM
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% shareholding and powers
5% or more with voting rights
May circulate written resolutions
Circulated written statement as to proposed resolutions
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% shareholding and powers
5%
May requisition a GM
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A private limited company with unamended model articles of association wishes to sell some of its land to the father of one of the directors.
The property has been independently valued at 70 K and the net asset value of the company is 600 K
Does this proposed sale of land require shareholder approval?
Yes, because the transaction is more than 10% of the company’s net asset value
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A private limited company with unamended model articles of association and a net asset value of 85K wishes to enter into some property transactions
-The finance director has agreed to buy a van from the company for the sum of 3K
-The brother of the marketing director has agreed to sell investment property to the company for the sum of 150 K
-The company has agreed to purchase freehold premises for 90 K from another company in which the sales director has a 15% shareholding and his wife has a 10% shareholding
What are the required resolutions to authorise these transactions?
A board resolution is required for the van as the value is 5K or less even though the transaction involves the director
A board resolution is required for the investment property as despite the value siblings are not connected persons in the context of SPTs
An ordinary resolution is required for the freehold premises as the director is connected with the selling company and the value exceeds 10% of the purchasing companies net asset value
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A private limited company with unamended model articles of association wishes to grant a two year guaranteed fixed term service contract to an existing director
What are the required formalities?
A board resolution will be required
The director will not need to declare his interest in the proposed transaction but will be unable to vote and will not count towards the quorum when the decision is made
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