Hard cases – Bad Law. Let’s Have Certainty.

There is an expression known to Lawyers – “Hard Cases Make Bad Law”. This is sometimes misunderstood to mean that if a Court judgment results in hardship – for example somebody old and infirm loses their home because they cannot afford the rent – then that – being a “hard case” must be the result of “Bad Law”.

This is not the meaning of the expression as lawyers understand it.

The expression means rather the opposite, – that the application of leniency by the Court in a hard case will result in “bad law”. Because if all you have to do to live rent free is be old and impoverished, then the questions surely arise, how old, and how poor?

The consequence of hard cases making bad law is that nobody knows what the law of the country is! – does a tenant have to pay? How elderly and infirm do you have to be to be allowed to stay in your home rent free? Lawyers would be unable to tell clients what the law is or predict with any degree of certainty how a court case would pan out. Surely we must all agree that the results of court cases should not be left entirely to the generosity the judge is feeling on the day of the case.

It is therefore some relief that I have read of a Court of Appeal decision – Prophet v Huggett [2014] EWCA CiV 1013. The Court of Appeal has made a decision which is a return to a traditional, stricter interpretation of the law with the consequent result of a return to certainty.

At the lower level, in the High Court the Judges heard what they evidently considered to be a hard case deserving of their help.

The plaintiff Prophet Engineering had a former employee who had left their employment and gone into competition with them. They were software writers and Mr Huggett their former salesman had left and is now selling competitor software and presumably approaching his clients to whom he used to sell Prophet Software.

In his original Contract Mr Huggett had signed a clause of “restraint of trade” which debarred him from selling Prophet Software to clients of Prophet for 12 months after leaving the employment of Prophet.

Reading those words it is clear what Prophet thought had been agreed. But read them again, and –wow – the clause provides no restriction at all on Mr Huggett’s activities. The one thing he won’t be doing is selling Prophet Software – he doesn’t work there anymore.
The software package he is now selling is a competitor’s product aimed at the same market as the Prophet software. Clearly, that is exactly what the Lawyers who had drafted the restraint of trade agreement were trying to prohibit – but they had simply got it wrong. The effect of their clause was to say that Mr Huggett was restrained from selling software to which he no longer had any access in the first place.

The Judges at the High Court had felt that the intended meaning of the agreement had clearly been understood by both parties and therefore what should be enforced is the intended meaning and not the meaning written down.

This with hindsight could be seen to be viewed by the court of appeal as a hard case – that is to say providing hardship for Prophet Software and they therefore made a bad law decision effectively rewriting the words of the restraint agreement.

The Court of Appeal, I am happy to say, was having none of it and has thrown out the High Court’s injunction saying that the clause – however much it misrepresented the intention of the parties – was written in plain English – Prophet had “made its bed and must now lie on it”. The Court of Appeal said– “the meaning of the proviso is clear and there is no reason for interpreting it any differently”.

If I may say so, three cheers for that.

The message for Lawyers is that they must draft their clauses carefully. They cannot expect the Courts later to correct their mistakes for them. And surely that must be right.
The case could also be viewed as a timely reminder to Companies to review their existing contracts with their employees and to make sure that their restraint of trade clauses are properly written and do indeed deny the activity which they are intended to restrict.

Please do contact me whenever you need accurate documentation for use abroad. http://www.atkinsonnotary.com and 0113 816 0116

Advertisements