IP Draughts has been running several online training courses in the last few weeks. He has experimented with a new format, consisting of a series of lunchtime, one-hour sessions. This has proved popular, particularly with solicitors in private practice.
The online format also has the advantage that we have attracted people from overseas, including participants from places as diverse as the US, Canada, the Caribbean, and Hong Kong. Forthcoming public courses can be found on the Events page of the UCL Laws website here.
IP Draughts likes to learn as well as teach on his courses. On his recent course on Drafting Legal Clauses, one of the participants asked if IP Draughts had seen a recent case on “all reasonable endeavours”. He hadn’t, but he was able to check it on BAILII in the following coffee break, and comment in the next session. It is now mentioned in the latest version of the course materials.
The case is CIS General Insurance Ltd v IBM United Kingdom Ltd  EWHC 347. It was heard in the Technology and Construction Court, decided by Mrs Justice O’Farrell, and published on 19 February 2021.
It may not be of interest to readers, but IP Draughts studied for his law degree at the University of Durham at the same time as Finola O’Farrell, and they were in the same tutorial class for some subjects (possibly including contract law). He remembers a bright student who said nearly as much as IP Draughts, perhaps to more effect. They achieved the same grade of degree (hint: it wasn’t a first).
Readers will be aware that some lawyers and clients think that there is a hierarchy of endeavours or efforts obligations. Some readers may be aware that Ken Adams considers that US judges apply a single standard, irrespective of the adjective used, and that English judges are misguided when they try to apply a hierarchy of standards.
For those who believe in a hierarchy, it might be:
- All reasonable
- Commercially reasonable
It is difficult to place “commercially reasonable” in an English context as this term is not encountered as frequently as it is in US contracts. In the US, it might be placed below reasonable efforts, but English case law suggests that reasonable efforts/endeavours is already at a very low level.
IP Draughts’ relevant courses mention the case of Rhodia v Huntsman  EWHC 292, in which the deputy judge Julian Flaux QC commented:
An obligation to use reasonable endeavours to achieve the aim probably only requires a party to take one reasonable course, not all of them, whereas an obligation to use best endeavours probably requires a party to take all the reasonable courses he can… It may well be that …all reasonable endeavours equates with using best endeavours.
Since the time of that decision, Sir Julian Flaux has become a very senior judge, as Chancellor of the High Court.
IP Draughts has always been troubled by these quoted comments. If one accepts a hierarchy of endeavours/efforts standards, why would two categories in the list mean the same? He is also a little worried by some historic negotiations that he was involved with, where all reasonable endeavours was accepted as a compromise between best and reasonable, on the understanding that it was lower than best.
Some comfort is given by Mrs Justice O’Farrell’s decision. The wording at issue in this case was:
The Supplier warrants and represents to Customer and each member of the Customer Group that… having taken all reasonable steps …that it has satisfied itself as to all risk, contingencies and circumstances to do with its performance of the Agreement.
Counsel in this case argued, in effect, that “all reasonable steps” was the same as “all reasonable endeavours”, and that “all reasonable endeavours” was the same as “best endeavours”. He cited a Singapore case, KS Energy Services Ltd v BR Energy (M) Sdn Bhd  SGCA 16.
Finola wasn’t having any of it. After discussing relevant case law, including Rhodia, she concluded:
Although an obligation to use best endeavours is likely to encompass all reasonable steps that could be taken, it might extend to more than an accumulation of moderate or sensible steps. It is conceivable that the circumstances of a particular case could require the party with such an obligation to go further, such as taking steps that were against his own financial interests, or steps that required extraordinary efforts. Such steps are unlikely to fall within the scope of a ‘reasonable endeavours’ obligation.
In other words, “all reasonable endeavours” is a variant of “reasonable endeavours”, and case law on reasonable endeavours is relevant, rather than case law on best endeavours.
All of these terms are vague and unsatisfactory, and the idea of coming up with a finely graduated hierarchy of obligations is usually unrealistic. Much is left for the judge to decide on the facts, and the outcome may be unpredictable. But with all these caveats, it is comforting to see some case law that puts back in its box the idea that best endeavours and all reasonable endeavours mean the same thing.