All reasonable endeavours

91isekp3dZL._AC_SL1500_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 [2021] 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:

  • Best
  • All reasonable
  • Commercially reasonable
  • 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 [2008] 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 [2014] 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.

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Article on IP monetization

Recently, IP Draughts was asked to write an article on IP monetization, for Managing IP magazine. The article can be found here.

IP Draughts is not keen on the word monetization, or its Franglais equivalent, valorisation. He tried to make the title of the article Making Money from IP. The editor changed it back again. The ghost of Mr Pettifog says that IP Draughts should get over himself.

franglais

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Queen’s birthday honours 2021

knightingAs might be expected, a fair number of the honorees in this year’s Queen’s Birthday Honours have been involved in supporting the nations’s Covid efforts.

Of particular interest to IP Draughts, following his Oxford/AZ Covid vaccinations: it seems that about eight representatives of AstraZeneca have been honoured, and a similar number of Covid researchers at the University of Oxford. Several researchers at UCL have also been honoured for their Covid-related activities.

Searches in the honours list for intellectual property and similar terms revealed very slim pickings. An unusually large number of government lawyers have been honoured this year, including some involved in commercial law.

IP Draughts congratulates Jennifer Suzanne McDonnell, a knowledge transfer manager, on her MBE.

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The narrow focus of law schools

justiceFrom a practitioner standpoint, law is a practical subject. The legal system exists to support people and society. When faced with a legal issue, we want to know what the law is, and how it affects us. We may also want to know how the legal system deals with that law – the processes involved in enforcing one’s legal rights. If we are dissatisfied with the law or the legal system, we may try to improve it, by campaigning for law reform.

As well as being practical, law is a learned subject. In the UK some, but not all, lawyers study law at university. In the specialist IP field, perhaps a majority of lawyers have non-law degrees. In place of a three-year law degree, they learn the rudiments of law via a one-year conversion course, known as the Graduate Diploma in Law.

The law departments of elite UK universities (many of which now call themselves law schools, emulating the American name, if not the model) have two main functions. They offer law degrees, and they conduct academic research into the law.

These two functions are distinct. Teaching of the law may involve some theoretical discussion, but it has to be grounded in teaching the basics. The most pressing reason for this is that law firms expect their future trainees to have been taught the core subjects. There is an article to be written about the symbiotic relationship between elite law schools and elite law firms, but that is not today’s subject.

Traditional law school teaching has focused to a considerable extent on case law. Understanding what the law is depends to some extent on how the courts interpret and apply the law. Case law is easy for law academics to teach; it requires only limited insights into how law is practised.

In IP Draughts’ view, the traditional, law-school approach to teaching law is too narrow. Essential practitioner topics such as contract drafting skills or negotiating techniques are mostly omitted, as not being “black-letter law”. IP Draughts would like to see contract law taught through the prism of looking at the clauses of contracts, but this seems too radical an idea for many law schools. It might also require greater use of practitioners to teach the subject.

The core interest of many academic lawyers is not in teaching law students. Instead, their careers are based on their research into the law. That research may be only loosely connected to the subjects that they are required to teach. Often, that research is far removed from the day-to-day concerns of their former students who practise the law.

IP Draughts has heard a law academic query why his colleagues bother to research “doctrinal” law, then speculate that such research may be of interest to practitioners. He has heard another indicate that a proposed research topic was too “instrumental” for the law department. He has been at an academic law conference that the organisers thought would be of interest to practitioners, but was sadly lacking in any practical discussion of issues that directly concerned practitioners.

In all of these cases, the problem, from IP Draughts’ perspective, is the gap between academic and practitioner law – a gap of understanding, and a gap in values.

In IP Draughts’ view, there is a type of legal research that should be conducted at elite universities but seemingly is not understood or valued by their law departments. If it is not suited for law departments, where should such research be conducted?

This is not an attack on the subjects that law academics currently research. It is a plea for elite universities to consider undertaking other types of legal research, and to open themselves up to new ways of thinking and acting.

 

Podcast of this article here.

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