Private Equity in UK Law

The common law or, more precisely, courts of equity have long afforded protection to the wrongful use of private information by means of the cause of action which became known as breach of confidence. A breach of confidence was restrained as a form of unconscionable conduct, akin to a breach of trust. The breach of confidence label harks back to the time when the cause of action was based on improper use of information disclosed by one person to another in confidence.

In the field of property law, equity is a potent protection of private rights, operating upon the conscience of those who have notice of their existence. But this is no reason for extending it into the public law of planning control, which binds everyone.

In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.

Since the hearing in the Court of Appeal, Opportunity has amended its pleadings in the action in the Grand Court. It now pleads an oral agreement that if Mr Demarco should cease for any reason to be employed by the Company as a deal-maker he would relinquish his interest in the Company "at its then value". It also pleads that, so long as he was so employed, he would be incrementally entitled to become a 3.5% shareholder over a period of five years.

It is common ground that the correct approach to the amount to be paid by way of a quantum meruit where there is no valid and subsisting contract between the parties is to ask whether the defendant has been unjustly enriched and, if so, to what extent. Thus, if A consults, say, a private doctor or a lawyer for advice there will ordinarily be a contract between them. Often the amount of his or her remuneration is not spelled out.

In determining whether there has been an express representation, and to what effect, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used. In determining what, if any, implied representation has been made, the court has to perform a similar task, except that it has to consider what a reasonable person would have inferred was being implicitly represented by the representor's words and conduct in their context.

But regard must also be had to any prior negotiations or agreement between the parties which indicate that they put a particular value on the services in question.