Supreme law

As the Easter term gets under way, Katy Dowell takes a look at who is doing what in the Supreme Court

When it comes to doing battle in the Supreme Court in front of a top-notch judicial panel of five, seven or in some cases nine, litigants want the best barristers available.

This term’s cases include a fight over patents for the reclining seats found in the first-class lounge on a plane; how and when a local authority can block access to a privately owned forecourt; and a trade secrets battle over anti-mosquito bed nets.

Of the five major civil cases to be heard this term all but one has had a silk added to its line-up. The battle between Kazakhstan-based power plants Ust-Kamenogorsk Hydropower Plant and AES Ust-Kamenogorsk Hydropower Plant, meanwhile, has seen a wholesale legal team revamp for the appellants.

At the Court of Appeal (CoA) Reed Smith partner Gautam Bhattachrayya instructed Matrix Chambers’ Antony White for Ust-Kamenogorsk Hydropower Plant. When it lost the case, which focuses on the scope of the English courts’ jurisdiction to grant injunctive relief in support of an arbitration agreement, the party turned to Herbert Smith Freehills to lead an appeal bid to the Supreme Court.

Partner Matthew Weiniger picked up the mandate and instructed in-house advocate Murray Rosen QC to lead the fight. Against expectations the case was won and the Supreme Court date set.

However, Rosen will not take the case to the highest court. That mandate has now been passed to Peter Goldsmith QC of Debevoise & Plimpton, who is working alongside partner Sophie Lamb for the appellants.

Goldsmith will face Essex Court Chambers’ Toby Landau QC, who has been brought in at the Supreme Court stage by Allen & Overy partner Richard Smith to replace Bernard Eder QC, who led the fight at the CoA but has since been elevated to the bench.

Elsewhere, Marks & Spencer (M&S) has become a client of litigation boutique Hage Aaronson, which launched last month through the hire of a four-partner tax litigation team from Dorsey & Whitney (11 March 2013).

Partner Simon Whitehead led the exiting team, taking with him M&S’s Supreme Court battle with HMRC. Whitehead has until now instructed Gray’s Inn Tax Chambers’ Nicola Shaw QC to lead the case for M&S but heavyweight David Milne QC of Pump Court Tax Chambers has now been added to the team.

Likewise, Kings’ Chambers’ Stephen Souvain QC has been brought in to lead the defence for solicitor Patrick Cusack, who is trying to stop his local council, the London Borough of Harrow, from blocking the forecout outside his property. Souvain will lead Landmark Chambers’ Tom Weekes, who has managed the case until now.

McGuirewoods partner Michael Tackley, meanwhile, has instructed Hogarth Chambers’ Alastair Wilson QC in place of 8 New Square’s Martin Howe QC for the anti-mosquito bed net battle. Howe, who led at the CoA, was otherwise engaged for the one-day hearing on 23 April.

The battle between Virgin Airlines and Zodiac Seats UK over patents liabilities has also seen some fresh counsel blood.

Ian Purvis QC of 11 South Square will be joined by setmate Henry Carr QC in leading the appeal for Zodiac, while 4 Stone Buildings’ Jonathan Crow QC has joined the Virgin team, having been instructed by DLA Piper to work with Richard Meade QC, who has led the case so far.

The only case where counsel has been maintained is a pensions battle launched by Nortel and Lehman Brothers against the Pensions Regulator. That case, which features 10 silks, remains in the hands of South Square. The set, which is known for its insolvency expertise, has six silks involved on both sides of the case, including William Trower QC, Robin Dicker QC, Gabriel Moss QC and Barry Isaacs QC.

Below is an outline of the leading cases to be heard by the court this term.

Commissioners for Her Majesty’s Revenue and Customs (Respondent) v Marks and Spencer (Appellant); Commissioners for Her Majesty’s Revenue and Customs (Appellant) v Marks and Spencer (Respondent)

Hearing date: 15 April

Length: One day

Supreme Court bench: L Neuberger; L Hope; L Mance; L Reed; L Carnwarth

HMRC is appealing the CoA ruling delivered by Lord Justices Lloyd, Moses and Etherton in October 2011. Marks & Spencer (M&S) has launched its own cross appeal.

In 2001, M&S announced it would close its European stores and those stores ceased to trade. The subsidiaries were in due course put into liquidation and were dissolved by the end of December 2007.

The question at the centre of this dispute is whether M&S could offset the losses of the German and Belgian subsidiaries against its profits in the UK by way of group relief.

The European Court of Justice ruled that this practice was acceptable in 2005 so long as the losses could not be used for relief in the subsidary’s resident country – the so-called ‘no possibilities’ test.

The main area of contention is now over when the test should be applied – at the end of the accounting period where the losses applied, which is HMRC’s position, or the date of the claim. M&S contends that it would not be possible to apply the test at the end of the accounting period, because it would not be possible to forsee what reliefs would apply.

For the appellant Marks & Spencer: Pump Court Tax Chambers’ David Milne QC brought in at the Supreme Court stage to leave Nicola Shaw QC Gray’s Inn Tax Chambers instructed by Hage Aaronson partner Simon Whitehead (former Dorsey & Whitney partner)

For the respondent HMRC: Pump Court Tax Chambers’ David Ewart QC instructed directly

Cusack (Respondent) v London Borough of Harrow (Appellant)

Hearing date: 23 April

Length: One day

Supreme Court bench: L Neuberger; L Mance; L Sumption; L Carnwath; L Hughes

This case concerns the 2009 decision by London Borough of Harrow to erect barriers around the front forecourt of the claimant’s commercial property.

The respondent Patrick Cusack is defending the council’s appeal that it has the right to close the forecourt because of the financial savings that could be made. Cusack, who is a solicitor, won the case plus costs at the CoA (see judgment). The appellate court held that the council was required to use section 66 of the Highways Act, which was aimed at improving public safety and under which compensation is payable to Cusack.

The Supreme Court will be asked to decide the following point: where there are two overlapping powers, can the local authority, having regard to the financial savings, choose which to invoke, or must it use the narrower and most focused provision of the two?

For the appellant London Borough of Harrow: King’s Chambers’ Stephen Souvain QC brought in at the Supreme Court stage to lead Landmark Chambers’ Tom Weekes instructed directly

For the respondent Cusack: Henderson Chambers’ Partrick Green QC leading Noel Dillworth of the same set instructed directly

Vestergaard Frandsen A/S (now called mvf3 Apps); (2) Vestergaard Frandsen; (3) Disease Control Textiles (Appellants) v (1) Bestnet Europe; (2) 3T Europe; (3) Intection; (4) Intelligent Insect Control; (5) Torben Holm Larsen (5) Trine Angeline Sig (Respondents)

Hearing date: 24 April

Length: One and a half days

Supreme Court bench: L Neuberger; L Clarke; L Sumption; L Carnwath; L Reed

This is a claim for misuse of confidential information consisting of technical trade secrets. The product in question? An anti-mosquito bed net called NetProtect.

The appellants claim that the respondents, who are their ex-employees, developed NetProtect using confidential information it owned in a database known as the ‘Fence database’.

The CoA rejected the case on the basis that it was not shown that defendant Trine Angeline Sig had access to the Fence database or the information contained therein or that she knew it had been used to develop NetProtect. The appellants appeal this decision contending that such knowledge is not required for a finding of liability.

The Supreme Court must decide whether or not a party who is the subject of an admitted duty or obligation of confidence must have actual or objective knowledge that the acts complained of constitute a breach of that duty or obligation.

For the appellant (1) Vestergaard Frandsen A/S (now called mvf3 Apps); (2) Vestergaard Frandsen; (3) Disease Control Textiles: 8 New Square’s Mark Platts-Mills QC leading Tom Moody-Stuart of the same set instructed by Field Fisher Waterhouse director James Martin

For the respondent (1) Bestnet Europe; (2) 3T Europe; (3) Intection; (4) Intelligent Insect Control; (5)Torben Holm Larsen; (5) Trine Angeline Sig: Hogarth Chambers’ Alastair Wilson QC (brought in on the appeal in place of 8 New Square’s Martin Howe QC) to lead 8 New Square’s George Hamer instructed by Mcguirewoods partner Michael Tackley

Virgin Atlantic Airways (Respondent) v Zodiac Seats UK (formerly known as Contour Aerospace) (Appellant)

Hearing date: 29 April

Length: Two days

Supreme Court bench: L Neuberger; L Hale; L Clarke; L Sumption; L Carnwath

This patent battle concerns the reclining seats you would find on long-haul business class flights.

The appellant, Zodiac Seats, is a designer and manufacturer of aircraft seating systems and in particular the ‘Solar Eclipse’ seating system, which lays flat for first and business class passengers. The seat reclines fully to provide a flat bed.

Virgin Airlines holds a patent for the seating system and passenger accommodation unit called the ‘Upper Class Suite’. It differs from the Solar Eclipse system in that the seat does not fully recline, instead requiring flipping forward so that the rear of the seat becomes part of the bed.

This dispute, on which the CoA decided costs in November (see judgment), will determine what approach should be taken by the court when applying a skilled person test in construing a patent claim.

The court will also be asked to decide whether a subsequent revocation of a patent by the European Patent Office has any effect on the liability of a party to pay damages for patent infringement where an English court has made a finding of infringement.

For the appellant Zodiac Seats UK (formerly known as Contour Aerospace): 11 South Square’s Henry Carr QC brought in at the appeal stage to lead the case with Ian Purvis QC of the same set and Brian Nicholson instructed by Wragge & Co associate Anthony Craggs

For the respondent Virgin Atlantic Airways: 8 New Square’s Richard Meade QC and 4 Stone Buildings’ Jonathan Crow QC coming in at the Supreme Court level instructed by DLA Piper partner Claire Bennett and consultant Geoge Godar

Ust-Kamenogorsk Hydropower Plant (Appellant) v AES Ust-Kamenogorsk Hydropower Plant (Respondent)

Hearing date: 1 May

Length: Two days

Supreme Court bench: L Neuberger; L Mance; L Clarke; L Sumption; L Toulson

This appeal concerns the scope of the courts’ jurisdiction, under the Senior Courts Act 1981, to grant declaratory and injunctive relief in support of an arbitration agreement in circumstances where there is no arbitration in existence or contemplation.

In those circumstances the courts’ powers under the Arbitration Act 1996 are not available, and the appeal therefore raises an important issue regarding the inter-relationship between the generally worded power of the court under the 1981 Act and the more specific jurisdiction under section 44 of the 1996 act.

This will involve consideration of a number of significant conceptual and policy questions, including whether the provisions of the 1996 act are intended to be exhaustive; whether the courts’ jurisdiction is limited to the protection of an arbitration rather than the agreement to arbitrate; and whether, as a matter of policy, the English courts should only intervene in support of an arbitration agreement where at least one of the parties wishes to arbitrate a dispute under English law and/or in England.

For the appellant Ust-Kamenogorsk Hydropower Plant: Debevoise & Plimpton partner Peter Goldsmith QC and partner Sophie Lamb

For the respondent AES Ust-Kamenogorsk Hydropower Plant: Essex Court Chambers’ Toby Landau QC leading Jessica Wells of the same set instructed by Allen & Overy partner Richard Smith and counsel Angeline Walsh

Bloom & Ors v The Pensions Regulator & Ors, Re: the Nortel Networks UK Pension Plan; Lomas & Ors v The Pensions Regulator & Ors, Re: the Lehman Brothers Pension Scheme.

Hearing date: 14 May

Length: Three days

Supreme Court bench: L Neuberger; L Mance; L Clarke; L Sumption; L Toulson

This long-running battle will have ramifications for the way the Pensions Regulator takes action against insolvent companies and how companies structure their pension schemes.

The CoA ruled in October 2011 that contribution notices (CNs) rank as expenses of an administration or liquidation, meaning they must be honoured ahead of payments to the insolvent companies’ unsecured creditors.

From the perspective of the pensions industry, the regulator’s teeth will be blunted if the Financial Support Directions (FSDs) prove to be valueless within insolvency, leaving schemes unfunded and the Pensions Protection Fund much more exposed.

From the perspective of the insolvency industry, there is an alleged threat that insolvency practitioners will decline to accept appointments to insolvent estates such as Nortel, where the potential pensions liability is over £2.1bn and, if given priority over the insolvency practitioners’ fees, may prevent the insolvency practitioners getting paid in full.

For the appellants Nortel Administrators: South Square’s William Trower QC, Wilberforce Chambers’ Andrew Mold and South Square’s Tom Smith, instructed by Herbert Smith Freehills partner Stephen Gale

For the appellants Lehman Brothers Administrators: South Square’s Robin Dicker QC, Wilberforce Chambers’ Paul Newman QC leading South Square’s Daniel Bayfield instructed by Linklaters partner Euan Clarke

For the respondent in both appeals Pensions Regulator: Erskine Chambers’ Raquel Agnello QC leading Wilberforce Chambers’ Jonathan Hilliard and 11 Stone Buildings’ Thomas Robinson, instructed directly

For the respondents Nortel Networks UK Pension Trust and for the Board of the Pension Protection Fund: South Square’s Richard Sheldon QC, Felicity Toube QC and Wilberforce Chambers’ Michael Tennet QC, instructed by Hogan Lovells partner Joe Bannister

For the respondents Lehman pension fund trustees and for the board of the Pension Protection Fund: South Square’s Gabriel Moss QC, Outer Temple’s Nicolas Stallworthy QC and South Square’s David Allison, instructed by Travers Smith partners Peter Esam and Susie Daykin

For the interveners Lehman Brothers Holdings and Neuberger Berman Europe: South Square’s Barry Isaacs QC, instructed by Weil Gotshal & Manges partner Joanne Etherton