Welcome to the June edition of Technol-AG, Addleshaw Goddard's monthly technology update.


House of Commons Committee launches inquiry into post-Brexit regulation

The House of Commons Scrutiny Committee (the "Committee") has launched a post-Brexit regulatory inquiry, looking at the benefits and challenges to businesses and the UK economy of diverging from EU rules and where laws should be rewritten or repealed by the Government.

Post-Brexit regulatory reform is a priority for the Government, which has stated that the exit from the EU creates a "unique opportunity" for the UK to support "the best interests" of UK businesses and citizens. 

The complexities of making amendments to regulations that have been controlled at EU-level, in the context of overlapping commitments in the Withdrawal Agreement and new international trade deals, will also be examined by the Committee.  

The inquiry will consider the views of affected stakeholders, and is seeking submissions from anyone with answers to questions posed in the call for evidence. The deadline for submissions is 22 July 2022. 

The Government is also expected to publish the "Brexit Freedoms Bill", intended to make it easier to amend retained EU law. Alongside the Brexit Freedoms Bill, the 2022 Queen's Speech also announced upcoming legislation in areas including financial services and data.

Watch this space for further updates, including relevant changes to existing law.

Fast and efficient computing

New research into computer performance has succeeded in combining a calculation function and memory function in computers, opening up the possibility for them to be as energy efficient as the human brain.  The study acknowledged that the technology has been created in a way that takes a small amount of space, which is expected to be useful in relation to items such as mobiles and Internet-of-Things devices, as well as being more energy efficient. The breakthrough involved the combination of two key tools required to enable advanced calculations – memory resistors (an electronic device that remembers its value) and oscillator networks (a circuit that is able to make calculations).

This breakthrough coincides with another development regarding a quantum photonic processor. The newly developed processor has been able to complete a task in 36 microseconds, in comparison to a traditional supercomputer which would have taken 9,000 years to complete the same task. 

Improved energy efficiency in computing is welcome news due to climate change pressures and the current increases in energy prices especially, with the spotlight firmly on the use data centres, due to greater cloud adoption, and the energy consumption that comes with mining Bitcoin.

Advocate General delivers opinion on Commercial Agents Directive

The Advocate General Ćapeta has issued an opinion on the interpretation of Article 7(1)(b) of the Commercial Agents Directive (86/653/EC) in the case of Rigall Arteria Management Sp. z o.o. sp.k. v Bank Handlowy w Warszawie S.A. (Case C 64/21) that there is no necessary entitlement to commission on repeat transactions where the transaction has been concluded as a result of the agent's action or where the transaction is concluded with a third party whom the agent has previously acquired as a customer for transactions of the same kind. 

The opinion is that Article 7(1)(b) is a ‘non-mandatory open model rule’ and therefore the parties may choose whether to include, exclude or modify the right under Article 7(1)(b).

It is important to bear in mind that this is an opinion of the particular AG and not a judgment by the Court of Justice of the European Union. Although it is not automatically binding on member states of the European Union (and, moreover, the UK), the opinion is likely to provide general guidance on what constitutes a non-mandatory provision in the Commercial Agents Regulations in the UK. Therefore, commercial agents intending to benefit from the provisions on commission on repeat transactions should seek to expressly provide for such commission in contracts with principals.

What is a reasonable time limit to exercise a contractual right to terminate

High Court judge, HHJ Keyser QC, has provided a useful observation (obiter) in the case of DD Classics Ltd v Chen [2022] EWHC 1404 (Comm) on what constitutes a reasonable timeframe to exercise a right to terminate for breach before losing this right. 

The High Court case concerned the sale of a racing car. The contract contained a provision that the seller was entitled to withdraw from the contract without 'reminder or setting a deadline' if the buyer failed to meet the payment obligation within 5 business days after the due date. The right to terminate arose on 1st of April when the claimant failed to make the required payment and was informed by the defendant that if the balance was not paid the defendant would exercise his right to terminate. However, the defendant did not terminate and persisted, instead, to request payment from the claimant. The claimant tendered payment on 7th April, however there was a delay with the defendant's bank crediting the funds and, although the claimant had taken all steps to transfer the funds, the defendant terminated the agreement on 13 April.

It was held that whilst the wording outlining this right to terminate the contract, i.e. "…without reminder or setting a deadline…", did not render time of the essence, nevertheless the contract itself was of the kind which required the right to be exercised within a reasonable time. In any case, it was held that regardless of whether the contractual right to terminate was lost by a failure to exercise it within a reasonable time (on the facts of the case), the defence was doomed because there had been a waiver of the right to withdraw due to the defendant's affirmation of the contract. The defendant's actions were found to encourage and, to a degree, facilitate performance, and thereby he acted in a manner which affirmed the contact as being open for performance (after the right to termination had arisen). 

The judge also clarified that these principles of accepting a breach and terminating a contract, or affirming the contract and waiving the breach, apply both to common law rights to terminate for repudiatory breach and termination rights in the contract. 

The judgment is also a reminder that it is essential to ensure that behaviour and conduct in relation to a contract, after a right to terminate has accrued, does not result in the unintentional waiver of this right – where such a waiver may occur regardless of any prescribed time limits for the exercise of such right. 

Please get in touch with the AG contacts below if you would like to discuss any of the topics in this month's update.

Key Contacts

Susan Garrett

Susan Garrett

Partner, Dispute Resolution
Manchester, UK

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