Online legal service provider loses breach of contract claim in English court
A claim by an online legal service provider alleging breach of contract by a client to whom it provided its services in addition to insurance packages has been dismissed by an English judge.
Epoq Legal Ltd claimed that DAS Legal Expenses Insurance Ltd breached the contract and was obliged to pay it an additional £17 per client in respect of a non-insurer client to whom its services were provided.
The case was heard in the High Court of Justice by Associate Justice Nicholas Vineall QC. N Mendoza appeared for the plaintiff and Louis Weston for the defendant.
As part of its core business of providing legal expenses insurance, the defendant purchased the services of the plaintiff to incorporate into its offering, which itself was typically associated with the primary insurance claims offered by other companies. Where the claimant’s services were included in the LEI-related services, this was considered “scheming activity” and resulted in Epoq charging a lower rate of £1.03 per customer to the defendant.
Beginning around 2011, the defendant provided the services of Epoq to a client, BCarm, which provided risk management products to help small and medium-sized businesses solve legal problems in a cost-effective manner. The plaintiff did not consider it a “scheme business” as BCarm was not an insurance provider, but claimed he only found out about it in 2019.
The plaintiff’s position was that DAS had breached a Commercial Lines Services Agreement dated April 1, 2011 by allowing BCarm customers to access its services at the rate of £1.03, and that a more appropriate charge regarding BCarm activities would be £18. per end user per year. The plaintiff further argued that at all relevant times, the DAS had stated that BCarm was associated with a scheme, or at the very least implied that it was.
On the other hand, the Respondent argued that there was a stand-alone agreement made through email exchanges which agreed on a price for the services provided to BCarm, or alternatively that the email exchange operated as an amendment to the April 2011 CLSA. All that was agreed upon was a price for the service to be provided to BCarm and the nature of those services.
In his ruling, Associate Judge Vineall said of the managerial contract, “It seems to me to be quite clear that the parties both intended their overall relationship to be governed by the CLSA, and I reject DAS’s suggestion. that one of them intended there to be a separate, standalone agreement just to deal with BCarm The correct analysis, in my view, is that what was agreed in relation to BCarm worked as an amendment to the CLSA. The more difficult question is how this amendment should be interpreted.
He continued: “What was agreed included an express agreement that BCarm would have access for £1.02 per end user per year. There was nothing in the amendment that limited this access to plan activities, and if and to the extent the terms of the CLSA were inconsistent therewith, the terms of the amendment would prevail over the terms of the CLSA. . I am not convinced that there is any inconsistency.
On the question of whether there had been a breach of contract, the judge observed: “It is alleged that ‘the defendant only paid the plaintiff the access fees relating to the customers of BCarm who were not insured’. DAS paid the agreed fee of £1.03 for each client granted access, so there is no such breach. If this rather cryptic allegation is really intended to be the main criticism of granting access to uninsured end users, it fails because when I built the contract there was no such restriction on BCarm end users.
Addressing an argument that the defendant had misrepresented BCarm as being associated with a scheme, he said: “After analysis, there is no argument of an express statement that BCarm ‘was associated with a scheme’ and it seems to me that the matter advanced is really one of implied rather than express representation.
Acting Judge Vineall concluded: “It is said that in the tender document provided on December 3, 2020, DAS repeated its requirement (and thus represented) that the services to be provided by Epoq would correspond to existing arrangements and would therefore include access pursuant to Scheme or schemes.’ It’s very vague. But in any event, the services provided included access in accordance with the Scheme’s activities, so there is no falsity.
The action was therefore ruled inadmissible.