Travis Perkins Commercial Focus - Summer 2024

Contents

Case Law

• Limitation of Liability clauses – Tata Consultancy Services Ltd v Disclosure and Barring Service [2024] EWHC 1185 (TCC)
• Parker-Grennan v Camelot UK Lotteries Limited [2024] EWCA Civ 185
• High Speed Two (HS2) Ltd and another v Persons Unknown [2024] 1277 KB
• Lidl v Tesco [2024] EWCA Civ 262

Legislation

• Dawn of the Procurement Act 2023

News

• JCT publishes Design and Build Contract Family 2024
• JCT Minor Works Building Contract Family 2024
• ICO publishes new guidance on calculation on fines

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Case Law

Limitation of Liability clauses – Tata Consultancy Services Ltd v Disclosure and Barring Service [2024] EWHC 1185 (TCC)

The High Court has held that the unclear wording of a limitation of liability clause in a contract provided a single aggregate cap which applied to all claims rather than multiple separate caps.

The clause was as follows:

“[the Contractor’s aggregate liability] in respect of all other claims, losses or damages, shall in no event exceed £10,000,000 (subject to indexation) or, if greater, an amount equivalent to 100% of the Charges paid under this Agreement during the 12 month period immediately preceding the date of the event giving rise to the claim under consideration less in all circumstances any amounts previously paid (as at the date of satisfaction of such liability) by the CONTRACTOR to the AUTHORITY in satisfaction of any liability under this Agreement”

In particular, the wording “the aggregate liability … in respect of all other claims, losses or damages shall in no event exceed £10,000,000…” amounted to the contractor’s total liability irrespective of however many claims, losses or damages might exist.

It did not matter that the wording “…claim under consideration” suggested more than one claim may be possible.

For further information, please see the full judgment here.

Comment: This decision serves as a warning that when negotiating and drafting “in the aggregate” limitation of liability clauses in contracts to ensure the drafting is clear. It is essential that where a party intends for multiple separate caps, the words “per claim” should be used in the clause.

For further details, please contact Amy Morley.

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Parker-Grennan v Camelot UK Lotteries Limited [2024] EWCA Civ 185

Ms Parker-Grennan (Claimant) played an online gambling game, which indicated that she had won a prize of £1 million. Camelot UK Lotteries Limited (Defendant) defended the claim on the basis that its terms and conditions provided that the prize to be awarded on any given play was pre-determined by the Defendant’s computer system and, in the Claimant’s case, the prize linked to the relevant play was £10 rather than £1 million.

The Claimant applied for summary judgment of her claim in the High Court, which was refused. The Claimant subsequently appealed the High Court’s decision to the Court of Appeal.

Issues

Upon registering for an account on the Defendant’s website, the Claimant confirmed that she agreed to be bound by the Defendant’s terms and conditions by ticking a box. The High Court held that the Defendant’s terms and conditions had been incorporated into the parties’ contract, that they were not unenforceable under the Unfair Terms in Consumer Contracts Regulations 1999 and that, on a true construction of the contract, the Claimant had won £10 instead of £1 million.

The Claimant appealed to the Court of Appeal, which dismissed the appeal. The Court of Appeal held that:

1. the relevant test was whether what the Defendant had done was reasonably sufficient to bring the terms and conditions to the notice of a player of the game;
2. if there were unusual or onerous terms, the Defendant was required to signpost them to the Claimant;
3. the Defendant had not signposted the relevant terms as to the pre-determination of the plays by its computer system – but these terms were not unusual or onerous, so it was not required to signpost them;
4. the Defendant had taken reasonable steps to bring its terms and conditions to the attention of the Claimant, by giving the Claimant a sufficient opportunity to read the terms when opening her account;
5. the terms and conditions were not unfair under the Unfair Terms in Consumer Contracts Regulations 1999; and
6. it is the amount that was shown on the final screen after selecting ‘FINISH’ which displayed the amount that had been won. 

For further information, please see the full judgment here.

Comment: This is a helpful case, which sets out the relevant tests to determine whether terms and conditions displayed on a website have been incorporated into a contract with a user of the website.

Notably, the Court of Appeal also urged the Law Commission to review the law concerning the accessibility of terms and conditions. We will continue to monitor whether the Law Commission takes any steps in light of this judgment.

For further details, please contact Louise Wilson and Josh Middleton.

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High Speed Two (HS2) Ltd and another v Persons Unknown [2024] EWHC 1277 KB

HS2 (Claimant) brought a claim against several defendants (Persons Unknown). The Persons Unknown were unlawfully trespassing on the HS2 railway line. This affected the works being carried out by the Claimant. The Claimant applied for an interim injunction to restrain the interference of the Persons Unknown on the HS2 route. The Court granted the injunction application in part against the Persons Unknown.

Issues

In September 2022, the Claimant brought a claim against the Persons Unknown for trespass and nuisance on the HS2 route. The Claimant applied for an interim injunction for the whole route, which was granted.

In May 2024, the Claimant sought a 12-month extension to the interim injunction as the works on the HS2 route were still ongoing. The Court found that there were material changes to the circumstances of the HS2 railway line as, in October 2023, it was announced that phase 2 of the HS2 project had been abandoned and that the line would be shorter in distance than originally anticipated. Whilst the original injunction granted in September 2022 was for the whole HS2 route, the Court found that an extension of the injunction to the whole route was no longer required.  The injunction was therefore not extended to land that had been abandoned – it was only granted for those parts of the HS2 route where works were current.

For further information, please see the full judgment here.

Comment: This is another noteworthy case, highlighting that judges are trying to balance the interests and costs of the Claimants and the Persons Unknown. Here, the Court was not prepared to grant an injunction covering the whole of the route and was only prepared to limit the scope of the injunction to proportionate parameters.

For further details, please contact Louise Wilson and Josh Middleton.

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Lidl v Tesco [2024] EWCA Civ 262

On 19 March 2024 the Court of Appeal (the Court) handed down its decision in Lidl v Tesco [2024] EWCA Civ 262. At first instance Lidl were successful in bringing trade mark infringement, passing off and copyright infringement claims against Tesco concerning its Clubcard logo. Tesco counterclaimed that a number of Lidl’s wordless trade mark registrations were invalid on the ground of bad faith, and were broadly successful in respect of the older registrations.

A comparison of the relevant marks / signs is set out below:

Tesco appealed against the finding of infringement, and Lidl appealed against the finding of bad faith.

As background, trademark registrations can be revoked for non-use if they have not been used for a continuous five year period. This means that new trademarks cannot be revoked within their first five years. This has led to the practice of so-called ‘evergreening’ where proprietors re-file for the same mark after the initial grace period has expired for their earlier mark, so they always have a registration which is not vulnerable to revocation.

Previous case law has held that blatant evergreening (in other words. where an identical mark is filed for identical goods/services very shortly after the five-year grace period expires) is likely to amount to bad faith and render the later marks invalid. However, there are shades and degrees to evergreening, and a well-advised trademark proprietor would seek to avoid it, for example by filing a slightly different specification or a slightly different mark.

In this case, Tesco were able to show that Lidl had refiled the Wordless Marks following (though not immediately after) the expiry of the five-year grace period for substantially the same marks and substantially the same goods. In addition, Tesco argued that the Wordless Marks were never intended to be used alone and were merely filed as a legal weapon. The Court held that this created a presumption of bad faith, which Lidl had to rebut by providing evidence of its intentions at the time of filing. This presented some difficulties for Lidl, as the relevant marks were filed in 1995, 2002, 2005, 2007 and 2021.

While Lidl was able to provide evidence as to their intentions in 2021 and evidence that by that time the Wordless Mark did serve to denote brand origin, they could not provide any evidence relating to 1995-2007, so they could not rebut the presumption of bad faith. The Court upheld the initial decision and rejected the appeal on this basis.

The key takeaway is that where businesses are re-filing similar marks, or filing what could be considered ‘defensive’ marks, care should be taken to record the intention of the business at the time of filing. This will be invaluable to support the argument that they had a genuine reason for filing and that the applications were not an abuse of the trademark system.

For further information please see the full judgment here.

Comment: The case highlights the importance of keeping robust records, especially in respect of the rationale for any re-filings for similar trade marks, as otherwise the new marks may be vulnerable to invalidity on the grounds of bad faith.

For further details, please contact Lloyd Lane.

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Legislation

Dawn of the Procurement Act 2023

The Government Commercial Function (GCF) has confirmed a 'go-live' date for the Procurement Act 2023 (PA 2023) of 28 October 2024. In the lead up to October, the GCF has confirmed that it will be providing further support and information on the new regime. This includes:

1. Further guidance: The GCF intended to publish a full suite of guidance documents by the end of June 2024. We are keeping this under review and will update further as this develops.
2. E-learning modules: These are aimed at procurement practitioners and will provide an accessible and flexible way to understand the nuances of the PA 2023.
3. Knowledge drops: A number of these have already been published, providing a high-level overview of the new regime for suppliers and other stakeholders.
4. Communities of Practice and Advanced Course of Deep Dives: These initiatives for procurement practitioners will provide a platform for shared learning and expertise.
5. A supplier information campaign: Intended to ensure that suppliers are well-informed about the changes brought about by the PA 2023, enabling them to adapt their practices accordingly ahead of go-live.

The implementation of the PA 2023 represents a significant shift in procurement law. We will continue to monitor and update the changes and resources available.

Comment: As the new Procurement Act continues to come into focus it is high time for any practitioners involved with public procurement to ensure that they are getting to grips with the new procurement landscape. It will be interesting to see how the change in Government impacts on the further support and information we are expecting to receive in this area.

For further details, please contact David Lane.

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News

JCT publishes Design and Build Contract Family 2024

On 17 April 2024 the Joint Contracts Tribunal published the new 2024 edition of the Design and Build family of contracts. The new edition provides a limited number of changes to the 2016 edition.

• the Building Safety Act 2022
• termination accounting and fluctuation provisions; and
• two new insolvency grounds reflecting the Corporate Insolvency and Governance Act 2020 (CIGA 2020). 

Other changes include:

• gender neutral language
• flexibility around the use of electronic notices
• incorporating the Government’s Construction Playbook to bring previously optional supplemental provisions (for example, collaborative working, sustainable development/environmental considerations) into the main contract

Crucially, the Building Safety Act 2022 and duty holder regime which did not exist when the 2016 edition was published has not been extensively covered in the updated JCT contract (which was expected).  Therefore, there is a need to have a Schedule of Amendments which covers some specific BSA requirements, for example there is no specific drafting for Higher Risk Buildings or the gateways regime.

Comment: Travis Perkins needs to ensure it is up to speed with the changes captured in the 2024 edition before entering into the new form of the JCT Design and Build contract. Freeths has previously provided a generic template schedule of amendments which are then updated for each project.

Please contact the Freeths construction team if you would like to be provided with a full summary of the key changes made to the 2024 edition compared to the 2016 edition and/or require template schedule of amendments.

For further details, please contact Amy Morley.

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JCT Minor Works Building Contract Family 2024

The JCT has announced that the Minor Works Building Contract family 2024 edition was released on 15 May 2024.

The release includes:

• the Minor Works Building Contract 2024;
• the Minor Works Contract with contractor's design;
• the Minor Works Sub-Contract with sub-contractor's design;
• a Tracked Change Document;
• the Short Form of Sub-Contract and the Sub-subcontract 2024; and
• updates to the Model Administration Forms. 

Comment: As with the new 2024 D&B JCT, Travis Perkins needs to ensure it is familiar with the changes captured in the 2024 Minor Works suite of contracts before entering into these contracts.  Freeths has previously provided a generic template schedule of amendments which are then updated for each project.

Please contact the Freeths construction team if you would like to be provided with a full summary of the key changes made to the 2024 edition compared to the 2016 edition and/or require template schedule of amendments.

For further details, please contact Amy Morley.

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ICO publishes new guidance on calculation on fines

On 18 March 2024 the Information Commissioner’s Office (ICO) published its latest guidance on its approach to calculating fines (the Guidance).

With the aim of offering greater clarity and improved transparency to organisations, the Guidance outlines the ICO’s ability to issue (and its methodology for calculating) fines resulting from breaches of the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 (DPA).

How is the Guidance structured?

The Guidance comprises three sections:

1. Statutory background: which provides a ‘refresh’ of the overarching framework surrounding the ICO’s enforcement powers, including the infringements under UK GDPR and the DPA, the maximum amount of a fine, restrictions on issuing fines, and the ICO’s approach to multiple infringements.
2. Circumstances in which the ICO consider it appropriate to issue a fine: including the seriousness of the breach, any relevant factors and the effectiveness, proportionality, and dissuasiveness of a fine.
3. Calculating fines: which illustrates the ICO’s ‘five-step’ approach to calculating the amount of a fine.

The Guidance also illustrates more generally, the ICO’s position and approach taken in relation to its enforcement powers, and which were identified during the period of consultation. 

How does the ICO calculate fines?

In a similar vein to the European Data Protection Board guidelines, the Guidance explains that where the ICO has deemed it appropriate to impose a fine, it will calculate the amount of the fine by following a five-step methodology:

1. Assessment of the seriousness of the infringement.
2. Accounting for turnover (where the data controller or data processor is part of an undertaking).
3. Calculating the starting point having regard to the seriousness of the infringement.
4. Adjustment to take into account any aggravating or mitigating factors.
5. Assessment of whether the fine is effective, proportionate, and dissuasive.

The Guidance also explains that the ICO may, in its sole discretion (and in exceptional circumstances), reduce a fine where an organisation is unable to pay an imposed fine due to financial hardship. In such a situation, the ICO may grant a reduction where the organisation can demonstrate that their financial position merits such relief.

Comment: The Guidance, which imparts greater certainty regarding how the regulator forms and can enforce its decisions surrounding fines will no doubt be welcomed by organisations.

It should be noted, however, that the ability to impose fines is only one of many tools at the ICO’s disposal, some of which may have a far greater impact on organisations. 

For further details, please contact Luke Dixon.