Category: Uncategorized

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

 

 

Mina Heung, barrister of Whitestone Chambers secures costs award against Bott & Co on grounds of acting unreasonably in bringing claims that were bound to fail.

In the cases of Ebdon, Duffy and Liddle v KLM Royal Dutch Airlines[1], District Judge Trigg made a wasted costs order against Bott & Co Solicitors, a Flight Delay Compensation company.    The judgement provides an object lesson on the dangers of pursuing a futile case and for failing to challenge your opponent’s evidence.

This article looks at the question of burden of proof in a flight delay compensation claim under the EU Regulation EC 261/2004 and how Bott & Co was met with defeat and ordered to pay for the Defendant’s wasted costs for failing to deal with litigation reasonably.

The Case

EC 261/2004 requires airlines to compensate passengers when flight delays or cancellations result in passengers reaching their final destination more than three hours later than originally scheduled, unless the airline can establish on the defence in Regulation 5(3) which states that: “An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.”

The Claimants brought actions against KLM for a cancelled flight, proceedings were issued on 11 May 2018.  KLM’s defence argued that the flight in question was cancelled at the request of Air Traffic Authorities.  On 23 August 2018, the claims were stayed by Liverpool County Court pending the appeal of Blanche v EasyJet[2].  On 6 February 2019, the Court of Appeal handed down its decision and ruled that disruption(s) caused by an Air Traffic Management Decision is deemed to be an extraordinary circumstance and that the Courts are not required to look at the reason behind the decision, meaning all airlines have to prove is the decision was made by the Air Traffic Control.  This is of course not the end of the matter,  as in order to rely on air-traffic management decisions under Regulation 5(3), airlines would still have to show that all reasonable measures had been taken to avoid the delay caused by the impact of the decision.

Following the decision in Blanche, KLM submitted direct evidence from Amsterdam Air Traffic Control Authority detailing the reason for the flight cancellation.  KLM further provided evidence to show that after considering a number of solutions, the claimants were put on the first available flight to their final destination, thereby discharging their duty on the “reasonable measures” requirement under the Regulation.

Notwithstanding the outcome of Blanche , the Claimants & Bott & Co still decided to argue the unarguable and prosecute the claims to trial by ignoring KLM’s evidence and counsel’s skeleton argument served ahead of the trial.  Bott & Co then elected to be absent at the trial on 7 October 2020 and pursued a written argument that runs contrary to the Court of Appeal’s decision in Blanche and contrary to the evidence provided by KLM, which was somewhat surprising as Bott & Co was the firm that represented Mrs. Blanche in her appeal to the Court of Appeal and lost.

The claims were eventually dismissed on the grounds of Bott & Co’s “audacious” legal arguments and the fact that KLM’s evidence regarding reasonable measures was not challenged at all – the claimants’ written submissions simply said that “the defendant has failed to support its contentions that reasonable measures were taken”.

An application for a wasted costs order pursuant to CPR 46.8 and section 51(6) of the Senior Courts Act 1981 against Bott & Co was immediately made by counsel at the conclusion of the trial.  At the costs hearing, Bott & Co admitted they were negligent in submitting and applying the wrong law but maintained that they were not wrong in pushing the claims to trial because despite the extraordinary circumstance arguments, KLM would still have to demonstrate they had taken all reasonable measures to minimise the delays caused to the passengers.  Whilst KLM accepted that they had to satisfy the “2-limb test” in order to successfully establish a defence under the Regulation, in the absence of any rebuttal evidence from the claimants and the fact that Bott & Co chose not to instruct representatives to attend the hearings and challenge KLM’s written and live evidence, the conclusion was inevitable given that the Court would only have KLM’s unchallenged evidence to rely on when making a finding.

In awarding wasted costs to the defendant’s, District Judge Trigg stated:

“With regard to the wasted costs order being sought against the legal representative, I have to consider whether the legal representative acted improperly, unreasonably, or negligently.  I take the view that they have acted unreasonably.

The answer to the question, “Has the conduct caused a party to incur unnecessary costs?” is “yes” and it is the costs of the hearing.  In answer to the question, “Is it just to order the legal representative to pay?”, the answer is “yes” to that as well.  There are consequences for failing to deal with litigation reasonably. “

There are a number of important lessons here: (i) know the law (ii) if you put a party to strict proof, do not just leave it here, unchallenged evidence will be accepted by the court (iii) know when to stop!  Even though you do not bear the burden of proof, examine the evidence before deciding to go to trial to avoid pursuing a hopeless case and facing a costs order.

© Mina Heung

Whitestone Chambers

[1] In the County Court at Staines, 4^th December 2020

[2] Daniel Blanche v EasyJet Airline Company Limited [2019] EWCA Civ 69

Mina Heung, barrister of Whitestone Chambers secures costs award against Bott & Co on grounds of acting unreasonably in bringing claims that were bound to fail.

In the cases of Ebdon, Duffy and Liddle v KLM Royal Dutch Airlines[1], District Judge Trigg made a wasted costs order against Bott & Co Solicitors, a Flight Delay Compensation company.    The judgement provides an object lesson on the dangers of pursuing a futile case and for failing to challenge your opponent’s evidence.

This article looks at the question of burden of proof in a flight delay compensation claim under the EU Regulation EC 261/2004 and how Bott & Co was met with defeat and ordered to pay for the Defendant’s wasted costs for failing to deal with litigation reasonably.

The Case

EC 261/2004 requires airlines to compensate passengers when flight delays or cancellations result in passengers reaching their final destination more than three hours later than originally scheduled, unless the airline can establish on the defence in Regulation 5(3) which states that: “An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.”

The Claimants brought actions against KLM for a cancelled flight, proceedings were issued on 11 May 2018.  KLM’s defence argued that the flight in question was cancelled at the request of Air Traffic Authorities.  On 23 August 2018, the claims were stayed by Liverpool County Court pending the appeal of Blanche v EasyJet[2].  On 6 February 2019, the Court of Appeal handed down its decision and ruled that disruption(s) caused by an Air Traffic Management Decision is deemed to be an extraordinary circumstance and that the Courts are not required to look at the reason behind the decision, meaning all airlines have to prove is the decision was made by the Air Traffic Control.  This is of course not the end of the matter,  as in order to rely on air-traffic management decisions under Regulation 5(3), airlines would still have to show that all reasonable measures had been taken to avoid the delay caused by the impact of the decision.

Following the decision in Blanche, KLM submitted direct evidence from Amsterdam Air Traffic Control Authority detailing the reason for the flight cancellation.  KLM further provided evidence to show that after considering a number of solutions, the claimants were put on the first available flight to their final destination, thereby discharging their duty on the “reasonable measures” requirement under the Regulation.

Notwithstanding the outcome of Blanche , the Claimants & Bott & Co still decided to argue the unarguable and prosecute the claims to trial by ignoring KLM’s evidence and counsel’s skeleton argument served ahead of the trial.  Bott & Co then elected to be absent at the trial on 7 October 2020 and pursued a written argument that runs contrary to the Court of Appeal’s decision in Blanche and contrary to the evidence provided by KLM, which was somewhat surprising as Bott & Co was the firm that represented Mrs. Blanche in her appeal to the Court of Appeal and lost.

The claims were eventually dismissed on the grounds of Bott & Co’s “audacious” legal arguments and the fact that KLM’s evidence regarding reasonable measures was not challenged at all – the claimants’ written submissions simply said that “the defendant has failed to support its contentions that reasonable measures were taken”.

An application for a wasted costs order pursuant to CPR 46.8 and section 51(6) of the Senior Courts Act 1981 against Bott & Co was immediately made by counsel at the conclusion of the trial.  At the costs hearing, Bott & Co admitted they were negligent in submitting and applying the wrong law but maintained that they were not wrong in pushing the claims to trial because despite the extraordinary circumstance arguments, KLM would still have to demonstrate they had taken all reasonable measures to minimise the delays caused to the passengers.  Whilst KLM accepted that they had to satisfy the “2-limb test” in order to successfully establish a defence under the Regulation, in the absence of any rebuttal evidence from the claimants and the fact that Bott & Co chose not to instruct representatives to attend the hearings and challenge KLM’s written and live evidence, the conclusion was inevitable given that the Court would only have KLM’s unchallenged evidence to rely on when making a finding.

In awarding wasted costs to the defendant’s, District Judge Trigg stated:

“With regard to the wasted costs order being sought against the legal representative, I have to consider whether the legal representative acted improperly, unreasonably, or negligently.  I take the view that they have acted unreasonably.

The answer to the question, “Has the conduct caused a party to incur unnecessary costs?” is “yes” and it is the costs of the hearing.  In answer to the question, “Is it just to order the legal representative to pay?”, the answer is “yes” to that as well.  There are consequences for failing to deal with litigation reasonably. “

There are a number of important lessons here: (i) know the law (ii) if you put a party to strict proof, do not just leave it here, unchallenged evidence will be accepted by the court (iii) know when to stop!  Even though you do not bear the burden of proof, examine the evidence before deciding to go to trial to avoid pursuing a hopeless case and facing a costs order.

© Mina Heung

Whitestone Chambers

[1] In the County Court at Staines, 4^th December 2020

[2] Daniel Blanche v EasyJet Airline Company Limited [2019] EWCA Civ 69

March 2021 marks the 30^th year anniversary for Stansted Airport since it’s opening in 1991. It’s been a long time since the conception of the airport and the pandemic has made those days of carefree travel seem even more distant – but it is still a cause for celebration!

Boasting a rich history, Stansted Airport may have only opened in 1991 but it’s operations have been running for more than 81 years. The first terminal dates back to 1942 and was involved in the major D-day bombings, helping military air force lead more than 600 craft over the beaches of France. Fast forward 40 years and Stansted was just starting construction on it’s new airport in 1986 – at the time the government enquiry accepted the construction on the grounds of bringing in 15 million passengers yearly. That number has grown over the years since it’s conception, with more than 100 million passengers passing through its gates in 2018. While the airport is now home to a wide range of carriers and crafts, some of its very first flights consisted of domestic services running to Glasgow as well as some Air France flights across the border.  Though the airport is known for its passenger and commercial travel above all, it is worth remembering that they also hold special importance for their involvement with the Air Force One and security airspace divisions. Its runways have seen Boeing-747s carrying space shuttles to assist Air Force One while also serving as the designated point for terrorist-diversion related incidents in airspace.

While its reputation as a low-cost airport has made it popular among travellers, COVID and subsequent lockdowns have taken its toll. Passenger levels have dipped dramatically during the pandemic, sometimes even down to double digits. However, with a lockdown exit plan starting to take shape the airport is confident it will be able to get back to its post-COVID numbers – and predicts that there will an uptake in the number of travellers once overseas travel is given the greenlight. The 30^th anniversary of Stansted then comes as a bittersweet celebration but the airport is hopeful that bigger and better is yet to come. They may not be able to celebrate properly this month or welcome passengers back immediately, but they are on a road to recovery. Steve Griffiths, Stansted’s managing director, cited this cause for hopeful celebration in his comment to the press:

“We can’t wait to welcome back our passengers to begin the next 30 years of Stansted’s story, and we are confident the airport has a very bright and successful future once people are able to start planning for their well-deserved getaways.”[1]

[1] https://www.airinternational.com/article/london-stansted-marks-30th-anniversary-official-opening

© Whitestone Chambers