Watford Junction
The Court of Appeal’s seismic division in Watford Electronics v Sanderson is discussed in depth by Margaret Harvey and Nick Rudgard of Addleshaw Booth at p24 of this issue.
Earthquakes imply aftershocks and adjustments. The importance of the decision can only be qualified by recalling the uncanny ability of the judicial process to reach different decisions on slightly different facts. The best judges (including those of the TCC) are masters in the art of qualification and distinction. Nevertheless, a welcome dose of clarity has now been injected into this area of IT law and the case will be a touchstone. The passage in the judgment of Lord Justice Chadwick at paragraph 551 looks set to be quoted time and time again, both in context and out of context. A couple more points are worth drawing out of the judgment:
The customer succeeded in extracting from the supplier an undertaking to use its ‘best endeavours’ in allocating appropriate resources to the project so as to minimise any losses that might arise from the contract. The judge at first instance considered this a ‘makeweight amendment’ and to be ‘virtually meaningless’. Lord Justice Chadwick, whilst finding in favour of the supplier on the effectiveness of its clause excluding claims for indirect or consequential loss, made it clear that the exclusion clause could only be relied upon if the best endeavours obligation had been complied with. So the purchaser may be in with a shout. This was, after all, an appeal on a preliminary issue and things might be different after a full trial.
One strategy when faced with a restrictive limitation of liability clause in the past has been to ignore it on the basis that it was more likely to be valid if you attempted to negotiate it. The dangers in this approach have now been exposed.
Court in a landslide, no escape from reality
I suggested at the end of my review of the C&L awards in the last issue that JD Wetherspoon might be reading the Court Service Consultation paper ‘Modernising the Civil Courts’ with interest. My tongue was only slightly in my cheek since there are some architecturally splendid county court buildings up and down the land which, like the banks before them, would benefit from being converted into restaurants, bars and drinking dens. Such uses would provide a home from home for those who frequented the buildings professionally; indeed, some might not notice the change.
One of the benefits of the information age is that the effective administration of justice can take place in fewer locations. The technology about which we read bi-monthly in this magazine gives us the opportunity to do things differently and better. There are nevertheless some concerns about promoting courtroom technology for its own sake.
What saves time in the courtroom often means that the preparation is far more costly. Simply because presentational tools make life easier and more interesting for judges and observers does not mean that time and money is going to be saved outside the courtroom. That is why in many cases, although it would be nice to have a “courtroom of the future”, parties just don’t bother to gear themselves up for it. In medium-sized cases, they’d rather use bundles, even if the judge would like a screen. Now if this was all funded by the £40 million pledged for the purpose by the government, all would be fine and dandy. But I just don’t see it somehow.
Like a lot of legal reforms in recent years, innovation can be driven by the Exchequer under the guise of access to justice. What saves public money is automatically sold as benefiting the consumer. All too often, the burden is transferred from suppliers (the courts) to users (lawyers) and the people that ultimately pay for the convenience of the administrators are the clients.
Endnote
That little piece of neutral citation should generate more crumpet fever in the Eastham household (see editorial, C&L Vol 11, issue 6).
Richard Harrison is a partner in Laytons.
