Author: Whitestone Chambers

Whitestone Chambers have been working throughout the last 18 months on cases such as this. If you need legal advice on any of the issues raised in this article, please do get in touch.

The case of London Trocadero (2015) LLP v Picturehouse Cinemas Ltd [2021] EWHC 2591 (Ch) marks the third success for landlords against tenants for unpaid rent during the pandemic this year.

The tenant, Picturehouse Cinemas Ltd, held two leases of cinema premises in Trocadero Centre, Piccadilly, London. Due to pandemic restrictions, the cinema had to close for certain periods which meant that Picturehouse Cinemas could not trade at all. Even during the gaps between pandemic restrictions, Central London’s trading conditions were so poor that the cinema largely remained closed and the earnings they gained were only a fraction of what they would have been in normal circumstances.

As a result of the pandemic’s impact on the cinema industry, Picturehouse Cinemas had not paid any rent since June 2020 causing London Trocadero to seek out a summary judgement for arrears of rent and service charge of £2.9 million.

The High Court rejected the defendant’s case that they were not liable to pay rent during the period when the premises could not be used as a cinema:

1. The argument that an implied term meant that rent was not payable during periods when the use of the premises became illegal and when the attendance was not at the anticipated level of Picturehouse Cinemas’ expectations. This failed because it was not obvious, and it would not give the lease ‘business efficacy’. Therefore, it did not make any commercial sense for the loss to be borne by the landlord when neither party had insured against loss by the pandemic.

2. The argument of failure of consideration as the premises could not be used for the purposes they were let for: use as a cinema. This failed because the court held that the use of the premises as a cinema was not ‘fundamental to the basis’ on which the parties had entered into the lease.

Moreover, the government’s proposal to introduce a binding arbitration scheme to help commercial landlords and tenants settle disputes regarding rent arrears that have arisen as a result of the pandemic and its restrictions was pleaded by the defendant in an attempt to adjourn the hearing. However, the court rejected the plea because the scheme was not applicable to cases on whether money was or was not owed by a tenant.

The High Court’s decision in the London Trocadero (2015) LLP v Picturehouse Cinemas Ltd [2021] EWHC 2591 (Ch) shows that tenants cannot rely on the government’s proposed arbitration scheme when seeking to avoid paying rent. Instead, this case informs tenants that they should withhold from arguing that rent is not due and attempt to come to an agreement with their landlord or go straight to arbitration. Whitestone Chambers has been working with numerous clients in negotiating and reading such agreements.

© 2021 Whitestone Chambers

The Competition and Markets Authority (CMA) have closed their investigation into whether Ryanair and British Airways owed customers who were legally prohibited from boarding their scheduled flights, due to lockdowns in their country, refunds stating that the legal position was unclear.

Despite thousands of customers being unable to go forth with their planned flights due to the restrictions of 2020 and 2021, the airlines have claimed that consumer protection law put them under no obligation to offer cash refunds to their customers. Therefore, in June 2021, the CMA began their investigation into this contentious area of law.

This month, the CMA closed their investigation into the airline companies finding that the consumer protection law entitles passengers to refunds only when the airline themselves cancels the flights to express an inability to provide their contracted services. However, as the airlines went ahead with some flights, the law is unclear about whether consumer protection law extends to passengers who were legally prohibited from taking their flight.

The CMA Chief Executive, Andrea Coscelli, believes that the law must adapt to fit with the uncertainties which have arisen from this unprecedented situation. Coscelli has stated, “Given the importance of this to many passengers who have unfairly lost out, we hope that the law in this area will be clarified.”

In addition, the regulator has argued that it would be unjustified to spend public money prolonging the investigation given the length of time it would take for an outcome to be reached in court and the uncertainty of the outcome.

Ryanair and British Airways agree with the outcome of the investigation as, in dispute to the claims from customers, the airlines argue that they have responded well to the challenges of travellers during the pandemic. The airlines offered vouchers or rebooking instead of refunds however, many customers availed this option. British Airways issued nearly 4 million refunds and offered highly flexible booking policies to the affected customers. Ryanair chief executive, Michael O’Leary, has also claimed – in a March 2021 statement to the Transport Select Committee – “All of the passengers who had requested refunds had received them.”

© 2021 Whitestone Chambers

In a series of disputes between neighbours Dr Mary Fairhurst and Mr Jon Woodard, over Mr Woodard’s house security system renovations which included security cameras and a Ring doorbell, a judge has held that Mr Woodard’s security system broke data laws and contributed to the harassment which led to Dr Fairhurst moving home.

It was found that Mr Woodard’s Ring doorbell captured images of Dr Fairhurst’s house and garden while the security camera mounted on Mr Woodard’s shed captured almost the whole of Dr Fairhurst’s garden and her parking space. In addition to video and image footage, the cameras collected audio data which Judge Melissa Clarke believed was “even more problematic and detrimental than video data” as it could capture the private conversations of neighbours.

Ring doorbells can pick up sound from 40 feet away enabling residents to turn their area of the neighbourhood and public space into surveillance hotbeds.

In conversation with Mr Woodard, Dr Fairhurst found that all data from the cameras were viewable by Mr Woodard on his smartphone or smartwatch in breach of the Data Protection Act 2020 and UK GDPR.

On one occasion, Mr Woodard sent Dr Fairhurst an image of her taken from the driveway camera claiming that there was a “suspicious stranger” loitering near his property. Judge Melissa Clarke determined this action as a threat and one of many examples of Mr Woodard utilising his security system to harass his neighbour.

In his defence, Mr Woodard claimed that his security system was put in place to prevent or detect crime which was claimed to be legal under s.1(3)(a) of the Protection from Harassment Act 1997. However, this was dismissed by the judge.

Amazon, the owner of Ring, has released a statement stating that customers must “respect their neighbours’ privacy, and comply with any applicable laws when using their Ring devices”. Furthermore, Amazon stated that there were privacy settings on the Ring doorbell to turn sound recording on and off.

The Information Commissioner’s Office has also stated that “Lots of people use domestic CCTV and video doorbells. If you own one, you should respect people’s privacy rights and take steps to minimise intrusion to neighbours and passers-by.”

The data privacy case of Fairhurst v Woodard (Case No: G00MK161) continues an ongoing conversation around the normalisation of domestic surveillance within our communities as the rise of relatively affordable home surveillance technology suggests that courts will be dealing with more data protection cases to do with security systems.

© 2021 Whitestone Chambers

The Amendment of Schedule 10 Regulations 2021 to the Corporate Insolvency and Governance Act 2020 is set to ease the restrictions over winding up petitions against a corporate debtor, taking effect on 1 October 2021 and set to last until 31 March 2022.

As a result of the Covid-19 pandemic, the Corporate Insolvency and Governance Act 2020 was put in place to restrict a creditor’s ability to present a statutory demand and winding up petition against a corporate debtor providing much-needed leeway for struggling businesses against the threat of winding up petitions.

Now, from 1 October 2021, those temporary restrictions – which were set to expire on 30 September 2021 – are being amended with new temporary regulations that are set to last until 31 March 2022. These regulations mean that a creditor may not present a petition for winding up unless the 4 conditions below are met:

Condition A is that the creditor is owed a debt by the company whose amount is liquidated, which has fallen due for payment, and which is not an excluded debt;

Condition B is that the debtor has been given written notice of the debt and an opportunity to provide repayment proposals for that debt;

Condition C is that at end of the period of 21 days, beginning with the day on which Condition B was met, the company has not made a proposal for the payment of the debt that is to the creditor’s satisfaction;

Condition D is that the debt is over £10,000.

In addition to these conditions, if the debtor makes proposals for payment after a creditor seeks a winding up order, the creditor must then give the court its reasons why the debtor’s proposals were unsatisfactory. The court will then review these reasons to conclude whether it can exercise its discretion to wind up a company.

Nevertheless, for commercial rent arrears built up during the pandemic, commercial landlords continue to be prevented from presenting winding up petitions onto them unless they can show that the reason for non-payment is unrelated to the pandemic.

The Schedule 10 Regulations are a reaction to the easing of pandemic restrictions with the winding up process slowly returning to its normal pre-pandemic order while continuing to support businesses still suffering from the economic fallout from the pandemic.

As well as this, these amendments are set to work alongside the proposed legislation in relation to the recently announced rent arbitration scheme. This scheme is set to apply to commercial tenants who have been affected by Covid-19 business closures and is set to encourage consensual agreement rather than continual court proceedings.

© Whitestone Chambers

The recent uprising and overtaking of the Afghanistan government by the Taliban has caused human right concerns to be pushed to the forefront of the world’s eyes and mind.. Data collection and storage may have devastating consequences for the citizens of Afghanistan.

Following Donald Trump’s deal with Taliban officials, Joe Biden still plans to withdraw all American Troops by 31 August with the UK aiming to remove troops but with no fixed date to help prevent a “humanitarian crisis”.^[1] The Taliban has suggested the data will be held for the aim of reducing voter and welfare fraud with new surveillance measures due to be implemented, including, digital identity cards for Afghan citizens and the use of biometric information – fingerprinting, iris scans and facial recognition; these potentially supporting Edward Snowden’s 2013 suggestion that surveillance is a mere “keystroke away from totalitarianism”.^[2]

Protecting Afghan Citizens:

Human Rights First – a human rights charity – has released a guide of how to avoid the misuse of biometric data and erasing your digital footprint for Afghan citizens;^[3] this could be critical for survival, with some individuals now being persecuted for posting anti-Taliban content.^[4]

The Human Rights Argument:

This, however is not an alien technology. Traditionally viewed ‘democratic’ societies like the US or UK use these forms of surveillance to protect their own citizens, but to what extent should this power be allowed to exist?

Subject to Article 8 of the European Convention on Human Rights, as  expressed in the Human Rights Act 1998,^[5] is that

“Everyone has the right to respect for his private and family life, his home or his correspondence.”

This right is not to be interfered with by the state, however, there are the lawful excuses of necessity for reasons of “national security” and “public safety” amongst others. But how can a matter of public safety be accurately defined? In a democratic society the technologies may be used to prevent extremism or potential terror threats. In Afghanistan the same measures are being used to hunt-down citizens who do not promote the same values as the Taliban –which leads to the question could the same argument be used? Taliban officials may view Western ideals of democracy as a threat national security, therefore their actions would be justified as they were acting “for the prevention of disorder and crime”.

Solutions:

In the paperless age, we all should become more concerned with how governments are handling our data. Gone are the days of in-person destruction of files, with more advanced systems required to ensure data is adequately protected. Remote data destruction is a necessity so that devices are no longer accessible to those who would misuse private information. As the coalition forces withdraw from Afghanistan, these protections should have been enforced to prevent the theft of data leading to potential loss of life.

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[1] Faulker, ‘Afghanistan: PM to press Biden to delay Kabul withdrawal’ https://www.bbc.co.uk/news/uk-58301269 [Accessed: 23 August 2021]

[2] Naughton, “Beware state surveillance of your lives – governments can change for the worse” Beware state surveillance of your lives – governments can change for the worse | John Naughton | The Guardian [Accessed: 23 August 2021].

[3] Human Rights First, https://www.evacuateourallies.org/resources [Accessed: 23 August 2021].

[4] Lockhurst, “Taliban ‘carrying out door-to-door manhunt’” https://www.bbc.co.uk/news/live/world-asia-58219963 [Accessed: 23 August 2021].

[5] Human Rights Act 1998, Schedule 1: The Articles.

 

A recent decision made in the High Court may significantly limit data breach litigation by claimant firms.

 

When a business suffers a data breach involving the personal data of its customers, claimant firms seek to sign up affected customers, issuing multiple claims for damages. Such claims are often for breach of the UK GDPR, breach of confidence, misuse of private information and negligence backed by confidential fee arrangements and After the Event (“ATE) insurance. Due to the perceived complexity of data claims and cost exposure created by ATE premiums, claimant firms have opted to create their own business model fuelled by out-of-court settlements.

 

In the case of Warren v DSG,[1] the defendants – Currys PC World (“DSG”) – suffered an external attack which resulted in the compromise of c. 10 million customer records, and a £500,000 fine by the UK Information Commissioner’s Office for violating the seventh data protection principle under the Data Protection Act 1998 (“DPA”) by not implementing appropriate security measures.

 

The claimant is one of these customers, who sought £5,000 for breach of the DPA (now replaced by the UK GDPR), breach of confidence, misuse of private information and negligence. Following claims for breach of confidence, misuse of private information and negligence being dismissed, the claimants were left with only a UK GDPR claim.

 

Such claims were dismissed for the following reasons: (1) all of the causes of action required some positive wrongful action to be taken, and there was no positive wrongful action in such circumstances as DSG was the passive victim of an attack, thus had not intentionally facilitated the data breach; (2) such actions do not impose any form of duty on DSG; and (3) there was no clinically recognised psychiatric harm in order to find a claim in negligence.[2]

 

The decision in Warren v DSG will have now considerably simplify the defence of similar claims, as well as making it increasingly difficult for claimant firms to recover ATE premiums in such cases due to the lack of a privacy claim, undermining the business model of claimant firms.

 

The judgement can be read here: https://www.bailii.org/ew/cases/EWHC/QB/2021/2168.html

 

[1] Darren Lee Warren v DSG Retail Limited [2021] EWHC 2168 (QB)

[2] https://www.shoosmiths.co.uk/insights/articles/data-breach-litigation-tap-brakes-end-road-claimant-firms