Patrick Bracher (ZA)

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$200 M for deceptively positive disclosures holds lessons (US)

By Patrick Bracher (ZA) on February 3, 2021 Posted in General

In December 2020 the US Securities and Exchange Commission imposed a $200 million negotiated fine on a corporation for alleged disclosure failures relating to its power and insurance businesses. The company was said by the SEC to have given a ‘deceptively positive picture to investors about its operations’ from 2015 to 2017. The company also … Continue reading

Lloyd’s protected cell company approved to promote investment in members

By Patrick Bracher (ZA) on February 1, 2021 Posted in Banking

In order to attract new forms of capital, Lloyd’s of London applied for and has had regulatory approval to set up a protected cell company known as London Bridge Risk. The idea is to make it easier for investment in the Lloyd’s market with a more transparent and efficient capital management process. It provides access … Continue reading

No liability for cricket ball injury

By Patrick Bracher (ZA) on February 1, 2021 Posted in General

Anyone who has studied the law of delict since 1951 is aware of the English case of Bolton v Stone which found that hitting a cricket ball out of a cricket ground is an incidence of the game and did not amount to negligence so that the passer-by injured by the ball could not sue … Continue reading

Amazon may be liable for a defective item bought online (US)

By Patrick Bracher (ZA) on February 1, 2021 Posted in General

In dismissing an application for summary judgment a US supreme court found that the trial court may well decide that Amazon was liable as the ‘seller’ of a defective thermostat that was installed in premises and caused a fire resulting in damage. Amazon alleged that all they did was to allow a third party seller … Continue reading

Application of the bump-up exclusion in a D&O policy (US)

By Patrick Bracher (ZA) on January 27, 2021 Posted in Insurance

The bump-up exclusion in a D&O policy excluded claims ‘alleging that the price paid … for the acquisition … of an entity is inadequate’. The insurers do not have to pay any amount due under a judgment or settlement representing the amount by which the price or consideration would be effectively increased. This is to … Continue reading

Nasdaq proposes board diversity for listed companies

By Patrick Bracher (ZA) on January 22, 2021 Posted in General

Nasdaq has proposed board diversity requirements as a condition to continued listing of corporations. The proposal adopts a ‘comply or disclose’ approach to encourage greater diversity on company boards requiring them to have at least one director who self-identifies as female and have one director who self-identifies as black or African American, Hispanic or Latinx, … Continue reading

No insurance cover because of exclusion of contract-based claims (US)

By Patrick Bracher (ZA) on December 9, 2020 Posted in Insurance

The insured was sued for and settled a claim for $77.5 million under the California False Claims Act for overcharging California government entities under the terms of particular contracts despite their offer of low prices to the government. The insured sued the insurer for an indemnity for its loss. The court denied the claim on … Continue reading

Tacit agreement on intermediary commission

By Patrick Bracher (ZA) on December 2, 2020 Posted in Insurance

Despite there being no explicit agreement on the amount of an intermediary’s commission, the client’s consent to payment of the commission may arise from the circumstances rather than an express agreement. A recent English case (on solicitors’ fees but pertinent here) points out that informed consent to pay commission may arise when the client knows … Continue reading

Provincial MEC not liable for child injured by swing in the private school playground – delictual liability for breach of statute

By Siyabonga Mathe and Patrick Bracher (ZA) on November 23, 2020 Posted in General

The Supreme Court of Appeal found that the Provincial MEC for Social Development was not liable for the injury of a child in the playground of a nursery school operated by an NGO in the province. The school was treated as if registered under the Child Care Act 1983 because the incident occurred in 2008 … Continue reading

Scope of right of pre-emption

By Patrick Bracher (ZA) on November 18, 2020 Posted in General

Where a person is granted a right of pre-emption or right of first refusal and the grantor breaches the right (by selling or otherwise granting it to a third party), the so-called Oryx mechanism comes into place and the holder of the right steps into the shoes of the person to whom the right was … Continue reading

Prescribed rate of interest is 7% from 1 September 2020

By Patrick Bracher (ZA) on September 14, 2020 Posted in General

The prescribed rate of interest has been changed with effect from 1 September 2020 to 7.00% per annum. The previous rate was 7.25%. According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all … Continue reading

Hot tub expert evidence catching on

By Patrick Bracher (ZA) on August 16, 2020 Posted in General

Evidence of experts in dispute hearings can be dealt with efficiently by using the ‘hot tub’ method to deal with disputes issue-by-issue rather than expert-by-expert: The parties decide between them what remaining issues have to be resolved by expert evidence and the list is given to the experts to deal with. The experts for all … Continue reading

Court applies ‘arising out of the operations’ exclusion in liability policy (US)

By Patrick Bracher (ZA) on August 16, 2020 Posted in Insurance

A Texas federal judge ruled that the insurer did not have to defend a design and construction consultant against the employer’s liability claim for a defective oil well because cover was excluded for property damage to ‘that particular part of real property on which any contractor working directly or indirectly on your behalf are performing … Continue reading

Arbitration clauses usually do not survive termination of contract for fraud

By Donald Dinnie and Patrick Bracher (ZA) on July 21, 2020 Posted in General

An arbitration or similar adjudication clause, contained in an agreement that is found to have been induced by fraud, does not survive the avoidance of the agreement. That would be offensive to justice. The position can only change if the parties specifically make provision in their contract for a dispute regarding fraud, misrepresentation or concealment … Continue reading

No lease renewal unless the rent is fixed by the parties or a third party

By Patrick Bracher (ZA) on July 21, 2020 Posted in General

An option to renew a lease at a rental to be agreed between landlord and tenant, failing which to be determined by a third party, was not validly renewed by the lessee offering an increased rent that was unacceptable to the landlord and then not invoking the process for third party determination. The tenant gave … Continue reading

Cyber risk cover – the pandemic lesson

By Patrick Bracher (ZA) on July 7, 2020 Posted in Insurance

One lesson for insurers from the COVID-19 pandemic is that carefully considered wording for potentially massive losses is essential. Cyber risk can lead to such losses. Here are links to some of the articles we have written on cyber risk to remind you: Cyber risk warnings for insurers Cyber cover must be specifically provided or … Continue reading

Even peremptory provisions in a statute may yield

By Patrick Bracher (ZA) on July 7, 2020 Posted in General

Even peremptory provisions in a statute may yield to two rules of interpretation: Laws must be interpreted to promote the spirit, purport and objects of the Bill of Rights. Due regard must be had to the purpose of the statute and more particularly whether adopting a strict or literal interpretation is consistent with what the … Continue reading

Obligations of independent schools before expelling a pupil

By Hishaam Khan and Patrick Bracher (ZA) on June 18, 2020 Posted in General

On 17 June 2020 the Constitutional Court handed down a landmark judgment which pronounced on a child’s own right to take part in due process or hearings concerning the termination of the contract between independent schools and their parents. The judgment concerns the constitutionality of a decision by an independent school to expel two scholars … Continue reading

The difference between ‘significant’ and ‘substantial’

By Patrick Bracher (ZA) on June 16, 2020 Posted in Drafting tips

In April 2020 the UK Supreme Court had reason to discuss the difference between ‘significant’ and ‘substantial’ in the context of what is a ‘significant reduction in life expectancy’. The court said that ‘like the skin of a chameleon, the adjective takes a different colour so as to suit a different context’. The word ‘significant’ … Continue reading

Insurance renewal not concluded by emails in the absence of clear acceptance (Aus)

By Patrick Bracher (ZA) on June 16, 2020 Posted in Insurance

When a fire and other perils policy came up for renewal on 24 August 2018, the insurer and the insured’s broker exchanged emails regarding renewal terms and hold-covered arrangements. The Victoria Supreme Court in Australia found that cover had not been renewed nor extended because the insured had not unequivocally accepted the renewal terms nor … Continue reading

Contracts interpreted according to wording, context and purpose

By Patrick Bracher (ZA) on June 8, 2020 Posted in Drafting tips

We have published a number of blogs about modern concepts of interpretation of legislation and contracts. A June 2020 decision of the Supreme Court of Appeal sets it out well. There is nothing new in what is said but it is a nice little package of how to interpret an agreement: ‘It is trite law … Continue reading

Defence of justifiable error in signing a suretyship fails

By Patrick Bracher (ZA) on May 17, 2020 Posted in General

The respondent in Airports Company SA Limited v Masiphuze Trading (Pty) Ltd was unsuccessful in relying on the defence of justifiable error in trying to avoid being bound by a suretyship agreement that he signed but did not read. The respondent entered into a suretyship for a lease debt in respect of premises at the … Continue reading

1000 strong: brush up on your legal knowledge

By Aneesa Bodiat and Patrick Bracher (ZA) on May 8, 2020 Posted in General

Our archive now contains over one thousand accessible, searchable blog posts, covering a wide range of topics. Here are some you may have missed – read them to quickly brush up on your legal knowledge: Corporate law How to establish a business in South Africa Blockchain, syndicated lending and secondary market trades 10 things to … Continue reading

DUI proved despite no conclusive blood test

By Patrick Bracher (ZA) on May 4, 2020 Posted in Insurance

The motor policy considered in Bantho v Alexander Forbes Insurance Co Ltd excluded an indemnity if the accident occurred while the driver was driving under the influence of intoxicating liquor or while the level of alcohol in the bloodstream exceeded the statutory limit. The court applied the exclusion despite a dispute about the accuracy of … Continue reading