The Practical Lawyer


Consumers – ‘consequential loss’

The FSA has said that references to ‘consequential loss’ in standard consumer insurance contracts may not be ‘plain and intelligible’ and therefore may be unfair.

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Money laundering – non-executives

Earlier this year there was much concern that many non-executive directors would be subject to registration requirements under Money Laundering Reg 2007.

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Directors – pension conflicts

Company directors who are also pension scheme trustees can face difficult conflicts of interest. On the one hand, as a director, there is a duty owed to the company’s shareholders. On the other hand, as a pension trustee, there is a duty owed to the scheme’s beneficiaries. There will be times when those duties conflict (eg a finance director of the company who is also a trustee of the pension scheme may be in a difficult position when dealing with funding and investment matters).

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Contracts – default interest rate

As noted above, the statutory rate of interest under the Late Payment of Commercial Debts (Interest) Act 1998 is 8% above base rate. That will apply unless the contract provides some other ‘substantial’ remedy for late payment. In addition, a claimant using the 1998 Act will also be entitled to fixed compensation for recovery costs (between £40 and £100).

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Restraint orders – creditors

Restraint orders in criminal proceedings appear, at first sight, much like freezing injunctions in civil proceedings. However, there is an important difference between them, as the court will not normally vary a criminal restraint order so as to allow the payment of bona fide debts owed by the defendant to unsecured creditors. Accordingly, unsecured creditors will have to wait until the end of the criminal proceedings before they can be paid.

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Letter of intent – binding?

If a document is headed ‘letter of intent’ then it will often be assumed that it cannot be legally binding. As such, ‘letters of intent’ are frequently grouped with ‘head of terms’, and ‘memoranda of understanding’ as being non-binding agreements. But, that is not necessarily the case:

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Commercial agent – termination

Under the Commercial Agency Regs 1993, a commercial agent is entitled to statutory compensation if the agency is terminated. The idea is that the compensation should reflect the agents’ efforts in establishing a market goodwill for the principal for whom they have worked.

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Consumer contract – arbitration?

To what extent can a business insert a compulsory arbitration clause in its consumer contracts?

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Companies – opportunist registrations

Traditionally, it was only possible to object to the registration of a company name if the name was ‘too like’ an existing registered company name. Now, however, there is an additional remedy specifically designed to deal with opportunist registrations (eg where someone registers with a view to exploiting the goodwill of an existing company).

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Contract – expert determination

Expert determination is a relatively informal contractual dispute resolution mechanism that is commonly found in commercial contracts. But, the key question is whether such an expert determination is binding or not.

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