December 2017 – Whitestone Chambers

Portia O’Connor won a landmark decision earlier this month when the Supreme Court unanimously decided to allow her appeal against the Bar Standards Board (BSB) and find that her claim was not time barred. This decision stems from a line of litigation starting in 2010 when the BSB Complaints Committee brought 6 disciplinary charges against Ms O’Connor. In May 2011 the Disciplinary Tribunal found 5 out of the 6 allegations proved. Ms O’Connor appealed to the Visitors of the Inns of Court who overturned the decision. Following her appeal, in 2013 Ms O’Connor issued proceedings against the BSB alleging a violation of Article 14 of the European Convention on Human Rights read in conjunction with Article 6 ECHR, contrary to section 6 of the Human Rights Act 1998 (HRA 1998). The BSB argued that Ms O’Connor’s claim was time barred under section 7(5)(a) of the HRA 1998. This section prescribes a time limit to bring proceedings of 1 year from the date on which the act complained of took place. The BSB contended that under this statute time started to run from the moment the initial Disciplinary Tribunal found the allegations against Ms O’Connor as proved and therefore the time limit for bringing a claim expired in 2012. Ms O’Connor submitted that time should run from the verdict of the Visitors of the Inns of Court in August 2012. In 2014, Ms O’Connor’s claim for compensation was struck out with the reason being that it was time barred and in any event the evidence did not support such a claim. Ms O’Connor appealed. Mr Justice Warby ruled that her appeal should be allowed in relation to her human rights claim, but that nevertheless it was time barred. Ms O’Connor took her dispute to the Court of Appeal where the then Master of the Rolls, Lord Dyson, held that the one-year limitation period under the Human Rights Act 1998 to challenge the BSB ran from when the disciplinary tribunal reached its initial verdict. She was given permission to appeal to the Supreme Court. The Supreme Court were asked whether the disciplinary proceedings constituted a single continuing act or a series of discrete actions for the purposes of the HRA 1998. The Supreme Court held that the disciplinary proceedings formed a single continuous act even though it consisted of separate steps. This meant that the limitation period commenced when the Visitors of the Inns of Court overturned the Disciplinary Tribunal’s decision in August 2012 not when the allegations against Ms O’Connor were found proved in 2011.The result is that Ms O’Connor was within time when she issued proceedings against the BSB in February 2013. There will be another court case to determine the merits of Ms O’Connor’s claim however the current decision is set to cause waves in the world of disciplinary proceedings.

Robert Pidgeon

Business contracts have become the language and form of commercial transactions. Their ubiquity is only surpassed by their functionality. They are useful for establishing one parties rights and obligations towards others as well as available remedies and dispute resolution mechanisms. Contracts can also confer powers upon a party to decide on issues that affect another party.

As useful as contracts are it is not always the case that all their terms are in writing. Terms are often implied by statue, common law or other mechanism and this can impact the way the contract is performed. Therefore, it can be the case that the interpretation and performance of a contract is not governed by the wording alone.

This is the case when exercising a “genuine discretion” as there is an implied contractual term for the party to use their decision-making power in good faith and “not in a way which is capricious, arbitrary or irrational”. This would imply that there is a limit to how the party can act and their discretion on how to perform the contract is curtailed somewhat. This differs from the application of an absolute contractual right which is not limited by such an implied term. So where do we draw the line between the two?

Whilst the courts have not produce an ultimate distinction between these two concepts, the Court of Appeal in Mid Essex Hospital Services NHS Trust v Compass Group UK & Ireland Ltd (trading as Medirest) [2013] EWCA Civ 200 at para 83 drew the line by stating “The discretion involved making an assessment or choosing from a range of options, taking into account the interests of both parties.”

Following on from this the Supreme Court in Braganza v BP Shipping Limited [2015] UKSC 17,subsequently went to great lengths to describe how such an implied term should operate. Lady Hale found that the decision of the employer, BP shipping in this case, was unreasonable in the sense of Associated Provincial Picture Houses Ltd v Wednesbury Corporation. [1948] 1 KB 223. This implies that the two stage Wednesbury unreasonable test is applicable when assessing the exercise of contractual discretion.

Thus, while this principle is in no way new, the above cases show how it has recently become more prevalent and is applicable to a wider variety of circumstances. This trend does not appear to be slowing with cases as recent of September 2017 (see BHL v Leumi ABL Limited [2017] EWHC 1871 (QB)) discussing contractual discretion in relation to collection fees.

Thus, although it seems the courts have not clearly delineated the boundaries between a genuine discretion and an absolute contractual right what is clear is that the law relating to business contracts is changing and taking more consideration of the parties’ behaviour in performing the contract throughout its term. It appears that the distinction is likely to come down to the wording of the clause in the context of the surrounding factual circumstances.

Jerome Wilcox

Month: December 2017

O’Connor v Bar Standards Board Disciplinary proceedings. A continuous process

Genuine Discretion vs Absolute Contractual rights