On the ninth day of Christmas, the High Court gave to me…nine losses mounting
With Advent upon us, and Christmas on the horizon, RPC takes a musical look back at the most important English judgments of 2018. Liability for all failures of numbering, rhythm and rhyme is hereby excluded.
It's rare for cases on damages to reach the Supreme Court, and there was just one in 2018: Morris-Garner v One Step (Support) Ltd[1] (perhaps particularly appropriate for a verse normally taken up with possibly aged leaping lords).
Damages for contractual breach is a complex area. Broadly speaking, however, damages are entirely compensatory in nature, measured by reference to the loss suffered by the claimant and not by any reference to the benefit gained by the defendant. One, even more complex, exception has been the possibility of so-called Wrotham Park[2] damages in cases of breach of a covenant and calculated by reference to the amount that a defendant would have paid for the covenant to be released or at least relaxed.
In Morris-Garner, the Morris-Garners had breached non-compete and non-solicitation covenants, and confidentiality obligations, put in place on sale of their shares in One Step. The courts at first instance and in the Court of Appeal had held that One Step could receive Wrotham Park damages, not least because calculating the loss caused would be extremely difficult.
The Supreme Court disagreed on almost all counts. It disliked the term Wrotham Park damages, preferring "negotiation damages". Indeed, it was dismissive of the case of Wrotham Park itself, describing it as "of little more than historical interest". It accepted that negotiation damages could be awarded in lieu for breach of an injunction or where the breach deprived the claimant of the use of its property or interfered with a property right (as might be the case for breaches of rights to tangible assets and intellectual property rights, and some – but apparently not all – breaches of confidence). But Morris-Garner itself was not, in the Supreme Court's view, such a case. It sent the case back to the High Court to calculate the actual loss.
One feels that the Supreme Court, in restricting the availability of negotiation damages, would have sympathised with the Roman Empire, taking on the task of the census that led to the trip to Bethlehem[3] – both being tolerant of imprecision where the number is not capable of measurement, but determined not to let the difficulty of the task stand in the way.
For more detail on Morris-Garner, see here.
The Twelve Judgments of Christmas (2018)
On the first day of Christmas, the High Court gave to me…a privilege in E-N-RC.
On the second day of Christmas, the High Court gave to me…two LIBOR reps.
On the third day of Christmas, the High Court gave to me…three corporate crimes.
On the fourth day of Christmas, the High Court gave to me…four contracts.
On the fifth day of Christmas, the High Court gave to me…five time bars!
On the sixth day of Christmas, the High Court gave to me…six exclusion clauses.
On the seventh day of Christmas, the High Court gave to me…seven fraudsters fleeing.
On the eighth day of Christmas, the High Court gave to me… eight duties owing.
On the ninth day of Christmas, the High Court gave to me…nine losses mounting
On the tenth day of Christmas, the High Court gave to me…[to be continued]
References
[1] [2018] UKSC 20
[2] Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798
[3] Luke 2:1-5. "And it came to pass in those days, that there went out a decree from Caesar Augustus, that all the world should be taxed. (And this taxing was first made when Cyrenius was governor of Syria.) And all went to be taxed, every one into his own city. And Joseph also went up from Galilee, out of the city of Nazareth, into Judaea, unto the city of David, which is called Bethlehem, (because he was of the house and lineage of David) to be taxed with Mary his espoused wife, being great with child."