In our autumn 2019 Briefing we welcomed the Law Commission’s final report on Electronic Execution of Documents and set out our views on certain practical matters including the crucial question of whether those documents requiring attestation of the primary signature by a witness necessitated the physical presence of the witness at the point of signature.
Our summary of the requirements for formalities of contracts likely to be encountered by invoice financiers referred to above also explains the circumstances in which certain contracts executed as deeds require formalities such as in some cases the presence of a witness.
As the era of unusually low interest rates comes to a close, it is worth paying attention to what rate of interest the courts are likely to allow in relation to successful financial claims.
Statue provides that in general terms once judgment has been granted in the English courts, interest of 8% per annum will be awarded on the judgment sum until it is paid.
Financiers have been, together with almost all other litigants, subject to what seems to be an ever-increasing spiral of expense in navigating the various fees and charges payable under the court system, a trend which is been in place now for almost 2 decades.
We were rather surprised recently to see a commercial law firm attempt to impose Third Party Debt Orders (“TPDOs”) both on an invoice financier and on debtors whose debts had been assigned to it, in each case in favour of a claimant who had secured a court judgment against the assignor.
TPDOs were formerly known as Garnishee orders, and are governed by Rule 72 of the Civil Procedure Rules which provides:
In a recent Briefing we commented on the case of Haydock Finance Limited v Starcruiser Bussing Limited [2021] EWHC 622 (Comm) in which we successfully represented a funder in defeating an unmeritorious challenge, backed up by the debtor’s “expert evidence,” to the technical aspects of an asset financier’s securitisation process: see https://www.bermans.co.uk/securitisation-and-the-right-to-sue/
We wondered whether this sort of challenge might spread across to invoice finance, so we were interested to see the Court of Appeal reject a series of technical challenges to the assignment process in the recent judgment in a series of cases reported at [2021] EWCA Civ 1682.
The business of law has changed significantly over the last couple of decades, ranging from significant developments in terms of the structure and operation of commercial law firms servicing business clients, to the funding models of “ambulance chasing” litigation covering a wide range of claims from alleged financial mis-selling to simple road traffic accident claims.
It is some time since we examined the topic of invoice finance for lawyers in a Briefing, and we were reminded of its significance in a recent court judgement involving a claim by a funder against a solicitor’s insurer which would have been of great interest to the invoice finance industry had it succeeded.
As we are moving towards the second anniversary of the pandemic it is worth pausing to reflect that, after some initial reluctance, technology has been quite successfully embraced both by lawyers and also by the courts to keep the system running.
Obviously meetings between lawyers and clients have largely been replaced by virtual contact through Microsoft Teams and Zoom, but virtual contact has now taken a firm foothold in relation to the litigation process.
The Court of Appeal has recently handed down judgment in Wood v Commercial First Business Ltdand Others and Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471, on the issue of broker “secret commissions”.
These decisions have caused something of a storm in the asset finance industry but the implications are not limited to asset finance, and somewhat surprisingly in our view the NACFB is recommending “both regulated and unregulated firms, working in all sectors, should be transparent about their commissions and fully disclose the amount of commission received”.
In our view it may be a little premature to raise the white flag on the question of disclosing the amount of commission to invoice finance clients unless they ask for that information. In both Wood and Pengelly, the broker’s terms and conditions notified the mortgagors that the broker “may” receive fees from creditors with whom it placed mortgages. If the terms had stopped here, then these would have been “half secret” cases (with the wording resembling that in Hurstanger Limited v Wilson [2007] 1 WLR 2351). However, the terms went on to promise that in the event commission was paid, the mortgagors would receive notification of the amount. Given the finding of fact that no such notification was received, the court correctly categorised these as fully secret cases.