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Preliminary Considerations and Definitions The progress of time and inflation means that the biggest commercial payouts of today quickly become yesterday’s news. Inevitably tomorrow’s payouts will be bigger still. So the ten cases examined have not been chosen just for biggest monetary value, but for bigness of interest and topicality. Again the international dimension of commercial compensation makes comparison relative. Payouts in American courts might well exceed those in less developed jurisdictions. For the purpose of this article cases will be considered from a variety of jurisdictions but on the common understanding of the commercial courts as those dealing with claims arising out of the transactions of trade and commerce, and including areas such as insurance, re-insurance, intellectual property, banking and financial services, carriage of goods by land, sea, air, and pipeline and exploitation of oil, gas and other natural resources, to name but a few.
Case 1: Protecting the Rolls Royce Logo – in 2008 the Danish Maritime and Commercial Court awarded Rolls Royce 250,000 Danish kroner in damages against a chocolate manufacturer, PR Chokolade A/S, who had misappropriated its well-known logo. Rolls Royce had first registered the trademark in 1904 and had never licensed it out, so it was easy to uphold its claim for infringement.
Case 2: Morrisey’s Successful Claim for Breach of Copyright – in 2013 he won $15,000 damages from Channel 4, who had misappropriated his song “Please, Please, Please Let Me Get What I Want†in their 2011 Gordon Ramsey’s Christmas Cookalong Live show. Big names and quite a big pay out!
Case 3: Virgin Atlantic Airways’ Failed Claim for Breach of Copyright – in 2007 Virgin had won its claim against Zodiac Seats UK Ltd for an infringement of its copyright on a flat-bed seat. However, Zodiac appealed the £48 million judgement and won, when it was ruled that the original patent had been sufficiently amended, rather than misappropriated. That this case had run for six years, involved hearings in the Court of Appeal, the European Patent Office and the Supreme Court and needed a team of 30 lawyers to fight Zodiac’s appeal shows the increasing “bigness†of such cases.
Case 4: £100 million Payout to Concorde Victims – in July 2012 96 German passengers died when the Air France Concorde crashed at New York. This pay out was remarkable for its record short eight months between the disaster and the offer of damages. Interestingly, it is believed Air France did this because they wished to stave off lengthier and more costly settlements in the American courts. Their early offer was on condition that any planned US lawsuits were dropped. That this pay out amounted to over £1 million for each victim, it serves to exemplify the ever escalating nature of claims. In 1996 a Birgen aircraft crash off the coast of the Dominican Republic saw the victims receive payouts of only £15,000.
Case 5: Volcanic Ash Cloud and Iberia Airlines Payout – in 2010 when the Eyjafjallajokull volcano produced a giant ash cloud thousands of passengers had their flights cancelled and pursued compensation. Iberia Airlines initially offered to payout only the cost of the refunded air tickets to one family, who had followed the airline’s advice and found alternative means of travel. Doing so had involved an extra £8000 cost. At appeal this claim was upheld, plus £2000 extra damages for the inconvenience incurred. Of note is the £50,000 the airline spent on contesting the claim!
Some Cases From the World of Banking and Insurance As major players in the commercial world, it is hardly surprising that some of the most interesting claims have arisen in the financial sector, and that they have involved high monetary claims and payouts.
Case 6: Standard Life’s £100 Million Payout – this was awarded to its 100,000 customers as compensation for losses from the insurance company’s Pension Sterling Fund. The Court upheld the claim that Standard Life had misled its customers to believe the fund was held in cash. As it turned out it was held in risky bank debts, especially sub-prime home loans. This case of 2009 stands as one of the early victims of the global financial crisis that had its roots in the sub-prime mortgage scandal. (The case echoes an earlier pensions’ panic of 1999, where Equitable Life lost in the Court of Appeal in 2000 its £1.5 billion claim over its Guaranteed Annuity Rate to investors in its pension fund. That payout caused the collapse of Equitable Life.)
Case 7: PPI Mis-selling Scandal and a Potential, Staggering £25 Billion Payout – this case is on- going, so no final figure is decided. As of 1 August 2013 £18.4 billion had been paid out by the major British banks for the wrongful selling of PPI to customers to cover loan and credit card repayments. Claims were running at 3000 a day earlier this year and the payout to date equates to £400 for every British adult.
Case 8: Emptage v. Financial Services Compensation Scheme Ltd 2012 – this recent ruling against the FSCS gives hope to individuals who are the victims of bad financial advice. Negligent mortgage and financial property investment advice left Emptage with huge debts and a loss of £70,000. Initially the award against FSCS was a mere £11,522. 98p but her challenge for full compensation for her loss was upheld, plus payment of £150,000 legal costs. Like so many of these complex commercial cases, that is not the end. FSCS won the right to appeal the judgement, but for the moment it represents a landmark legal ruling. A wave of similar claims is predicted.
Case 9: A Case Involving a Commercial Oil Giant and with Important Environmental Issues BP’s 2010 Deepwater Oil Spill – three years on and this case looks far from final payout. It is being tried in the US courts and the latest claims have been in the region of $9.6 billion, but because they include future business loss claims, a figure of $25 billion has been suggested. BP’s challenge to the legality of these claims has been rejected: the $40 billion that BP has supposedly budgeted for the case may well be needed. Apparently BP has already spent $19.7 billion.
Case 10: A Small Case Which Shows How To Finance Commercial Litigation Hackney Empire v. Aviva Insurance 2013 – this has been described as a victory for little David (Hackney Empire, a small East End arts venue) against the insurance giant, Goliath/Aviva. Like so many commercial claims it involves construction and property issues, insolvency and insurance issues and has been protracted and through several courts and appeals. In brief, Hackney theatre’s re-build project went badly wrong when the builders went bankrupt in 2003. In 2004 Aviva (then Norwich Union) refused to honour its £1.1million insurance bond. Hackney Empire won a first appeal in July 2011. Two counter appeals followed from Aviva in December 2012 and March 2013. A final appeal by Aviva against an additional £470,000 interest claim was rejected in August 2013. Faced with enormous debts, Hackney Empire was only able to fund its claim with a loan from Alan Sugar and that the solicitors ran the case on a no-win, no-fee basis. Some Concluding Thoughts The X cases considered represent but the tip of the iceberg of interesting and topical commercial court payouts. Such payouts will continue. They will be amazingly higher and higher figures. Most will involve big commercial companies and big law firms. Many cases will be group actions. The last case shows the increasing trend for would-be litigants to secure third party funding, either from individuals or designated third party funding companies. Payouts are big, but so are the costs of pursuing and defending such claims.
This article was provided by Vannin Capital, the leading experts in litigation funding. Visit litigationfunding.com today for more information.
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