In 2016 the High Court considered the validity of an assignment of a lease by a tenant to its guarantor. The antiavoidance provisions in section 25 of the Landlord and Tenant (Covenants) Act 1995 ("1995 Act") strictly limit the freedom of contract of parties to leases governed by that Act, broadly, those granted after 1995. Agreements which frustrate those provisions are void even if they are commercially justifiable.

BRIEF FACTS AND DECISION

EMI Group Limited v O&H Q1 Limited [2016] EWHC 529 (Ch)

In Peel Port Shareholder Finance Co Ltd v Dornoch Ltd [2017] EWHC 876 (TCC), Peel Port Shareholder Finance Co Ltd (Peel Port) applied for pre-action disclosure of the defendant's insurance policy under Civil Procedure Rule 31.16. Peel Port was not able to rely on the provisions in Third Party (Rights against Insurers) Act 2010 because the defendant was not insolvent. Peel Port argued that it was highly probable that rights against insurers would be transferred to them under the 2010 Act in due course.

The English courts have recently wrestled with the Cross Border Insolvency Regulations 2006 (“CBIR”) in a case about the lifting of the automatic stay on proceedings against Korean company STX Offshore & Shipbuilding Co Ltd

On 24th August 2016 the claimant issued protective proceedings against four defendants for damages in excess of £10 million in relation to alleged defects in the design and construction of a high bay warehouse and associated infrastructure ("the Works"). The third defendant ("Twintec") was responsible for the design and construction of a steel fibre reinforced concrete slab, which formed part of the Works, and was insured by Royal and Sun Alliance Insurance PLC ("RSA").

Claimant Litigant in Person recovers 150 per hour for his time

Spencer and another v Paul Jones Financial Services Ltd (unreported), 6 January 2017 (Senior Courts Costs Office)

Summary

A claimant litigant in person can recover costs at his typical hourly rate (150). Whilst the burden of proving such financial loss lies on the claimant, the burden is not impossibly high.

Facts

A recent decision in the High Court has seen an application for pre-action disclosure of an insurance policy dismissed because the defendant was not insolvent.

Peel Port Shareholder Finance Company owned a warehouse that was damaged by a fire caused by Dornoch. They argued that their claim was highly likely to win but that, if it did, it would cause Dornoch to become insolvent.

Peel Port therefore sought ‘pre-action disclosure’, meaning Dornoch would have to disclose applicable insurance cover information to Peel Port before they decided whether to proceed.

Court refuses application for pre-action disclosure of insurance policy

The High Court has refused an application for pre-action disclosure of the public liability insurance policy of a company that, if litigation were pursued against it, was likely to become insolvent.

Background

There have been a number of cases in recent years in which a party has sought to utilise the provisions of the CPR in order to obtain information on the opposing party's insurance arrangements, rather than waiting for that party to go insolvent in order to use the procedures provided by the Third Parties Rights Act 1930 or 2010. The recent case of Peel Port Shareholder Finance Co v Dornoch Ltd [2017] EWHC 876 (TCC) looks at this again in light of the discretion which Judges have under CPR31.16 for applications for pre-action disclosure and attempts to shut the door on such actions.

The Insolvency Rules (England and Wales) 2016 (“IR2016”) came into force on 6 April 2016 applying to most corporate and personal insolvency regimes in England and Wales. However, there is still unfinished business for the Government and further regulation is expected to be introduced later this year to ensure the changes apply uniformly in all areas.

When reviewing a security for costs application under CPR 25.12, the courts are faced with the challenge of striking a balance between an impecunious claimant’s access to justice and the possibility of a successful defendant being unable to recover their costs. This is because the general rule in relation to costs under CPR 44.2 is that the unsuccessful party will pay the costs of the successful party.