Swedish Supreme Court Issues Important Judgment Regarding Assessment of Contractual Limits of Liability
On February 24th 2017, the Swedish Supreme Court issued a judgment which clarifies the principles for assessing whether contractual limits of liability shall be upheld or set aside.
For many decades, the Swedish courts have upheld the principle that contractual limits of liability shall always be set aside when the party in breach has acted in gross negligence. This has greatly influenced both negotiation and drafting of clauses regarding limits of liability in commercial contracts. Consequently, the principle has also greatly influenced the grounds invoked to obtain judgments for full compensation following breaches of contracts containing limit of liability clauses.
In its new judgment, the Swedish Supreme Court has extensively modified this principle. The judgment clarifies that assessment of limits of liability shall not primarily be based on whether a party in breach has acted grossly negligent, but instead by means of an overall assessment of whether the limit of liability can be deemed reasonable or not taking into account all relevant circumstances at hand, in accordance with section 36 of the Swedish Contracts Act. This means that the Swedish courts will be able to assess limits of liability based on more objective and nuanced circumstances than before.
In the case at hand, where Advokatfirman NorelidHolm successfully represented the defendant, the Supreme Court stated that a limit of liability in a building surveyor’s terms and conditions was not unreasonable to uphold against buyers of the surveyed property, inter alia because the services of the surveyor had originally been retained by the seller of the property and because the ratio between the fee for the service and the maximum limit of liability was substantial.
Furthermore, the Supreme Court also stated that a buyer is not deemed to have fulfilled its duty to duly examine the property in cases where the buyer merely purchases a survey protocol originally retained by the sellers of the property. This means that a property buyer must retain a building surveyor for itself rather than to rely on the seller’s survey, a conclusion which will likely have profound impact on the market for second-hand purchases of building survey protocols.
CRM Systems and Privacy – Potentials and Pitfalls
CRM-systems have been around for many years in many organizations and few would argue against the benefits of having everything from internal contacts to data on customers, orders and business partners easy accessible and actionable in one system capable of providing insights and structure. However, data needs to be current and accurate in order for your organization to benefit from it. Issues of data management are also of great importance from a data privacy perspective, a perspective that may not be easy to reconcile with the full potential use of a CRM-system.
Under the EU General Data Protection Regulation (GDPR), expected to enter into force in 2018, with, its stricter rules on consent and information on personal data processing this, will become increasingly difficult. In fact, many organizations could find it more cost efficient to scrap their old data and start with a clean slate, as opposed to tracing back and assessing in retrospect from where the data was collected and for what purposes, if valid consent was given, and if stated purposes and consents cover the anticipated future processing.
So how can customers’ personal data be easily collected and processed while at the same time addressing privacy concerns and complying with stricter privacy regulations? One solution could be the creation of a customer club or other forms of associating with customers under specific terms and conditions, such as on a social media platform.
A key issue here is respecting the customers’ privacy concerns by carefully drafting and amending T&Cs so that they at all times cover the intended data processing. This means explaining the purposes and details of the processing in plain and understandable language so that customers understand what their personal data will be used for. Naturally, the same applies if interacting on social media. Here it is important to remember, that just as the platform has got its T&Cs, your organization needs its own platform-specific T&Cs before it is set to start gaining new customer insights.
Finally, three things to keep in mind to benefit from customer data in the future:
1) make sure that your CRM-system provides sufficient data management possibilities to comply with the GDPR,
2) make sure that all information relating to the processing of personal data is transparent and understandable, and
3) make sure that providing personal data offers added value back to the customer.
Expert Insight into Advertising Law – Susanna Norelid Interviewed in Lawyer Monthly Magazine
Advertising Law is a far-reaching practice area affecting several different subjects. To find out just what is involved in Advertising Law and the issues that surround it, Lawyer Monthly speaks to Susanna Norelid, co-founder and managing partner of Advokatfirman NorelidHolm in Stockholm, Sweden. Susanna specializes in particular in corporate and commercial law, media- and marketing law, as well as all forms of dispute resolution including litigations and arbitrations. NorelidHolm is a corporate law firm which offers premium quality legal services. They offer legal assistance in most fields of business law and is top-ranked within several areas of law. The firm represents both multinational and larger national companies as well as smaller local businesses and many of its clients are industry leaders in their respective fields.
Q: How much of your workload is occupied with advising on matters related to advertising?
Approximately 40% of my workload is concentrated on advertising and marketing law, incl. data protection and IP issues. However, we see a trend that more and more questions raised by our clients are in one way or another related to their sale and marketing activities (e-commerce, IT/Media related issues, advertising through social media, personal data issues etc). We therefore expect an increase regarding this business area in the future.
Q: How drastically has the field of advertising law altered since as the internet, and especially social media, increasingly takes over modern life?
It has changed quite dramatically. Nowadays online advertising isn´t limited to search engines and websites like they used to be. Some ten years ago businesses could reach their audience based on keywords they used frequently or websites they visited often. Businesses can now reach a much broader audience through targeting, and even retargeting, them with adverts through platforms. This raises a lot of legal issues of course and especially all issues relating to personal data protection and liability issues.
Furthermore, the use of social media as a marketing channel also trigger a lot of other legal issues like for example, copy right issues, issues relating to another person’s name and picture, bloggers content (is it advertising or not?) etc.
Q: What unique legal challenges does advertising on social media bring? How do you overcome them?
We see more and more clients asking for copy clearance when it comes to webpages, advertising content and layouts etc. Most of our clients are marketing their products/services cross border which means that we have to set up international networks of specialists to meet our clients demand.
We also are more frequently asked to provide legal clearance of privacy policies and drafting content (legal texts, disclaimers etc). The companies seem to beware of some of the risks which give them a reason to ask for advice from specialists. We can then see other risks and other issues to take into consideration and assist them to make sure all legal aspects are looked into. We also offer a lot of training for advertising firms, marketing departments and others so that they become more aware of the risks and when to ask for legal assistance. We usually say that they do not need to be specialists themselves but we do want them to know when there is a red flag and know when to look for professional legal assistance.
Finally, we experience that with the advertising on social media, you – as a legal adviser – need to be really specialized and professional within your field. Historically it was not that many issues to take into consideration. It was enough to look for misleading statements and maybe some violations of IP rights. Today, you really need to be up to date with many different legal areas of law but you also need to understand some of the technical parts and have the ability to work cross border. Advertising law is not local any longer.
Q: Sweden famously banned adverts aimed at children; with many people saying that it would not work. In your opinion has it been effective?
Yes I think so. We see a quite strict compliance with the rules even though there are always some exceptions. The non-compliance cases are usually found in connection with computer games directed towards children.
Q: Your firm offers ´multi-faceted´ assistance to clients; in relation to advertising campaigns how does it do this?
We assist our clients´ in copy clearance of advertising campaigns, including online channels and of course also more traditional channels. With that said – and as explained above – nowadays the advertising through social media triggers so many other issues than just marketing law issues. We have to look into contractual issues, liability issues, data protection, IP questions and so on. You cannot just be a marketing law specialist today when dealing with these kind of clients. You need a lot more legal skills and also – preferably – some technical skills too to be able to understand this legal world.
Q: What did you find most rewarding about working on advertising law issues?
There are always new challenges, new ideas and new technology to take into consideration and learn about. There are always very creative and energetic people to work with to find the best solution which meets both the wishes from the client but also to make it in compliance with the rules. It is never boring! Always challenging!
The interview may be found Lawyer Monthly Magazine, issue 68-15, which may be accessed online at http://www.lawyer-monthly.com/magazine/LM68-15/
Now is the Time to Act – The Proposed EU General Data Protection Regulation
In Brussels, the protracted negotiations on an EU-regulation on the processing of personal data is drawing to an end. A few things are however already clear – the processing of personal data will be more strictly regulated than at present, and non-compliance will be costly with possible sanctions of up to 2 % of annual global turnover. Also, the regulation will apply globally to the processing of personal data on behalf of EU entities or regarding persons within the EU.
Although the final wording of the regulation is expected to be agreed on towards the end of 2015, and its entry into force will take place during the first half of 2018, it will be wise to start preparations sooner rather than later.
By already starting to review existing systems, how personal data is processed and taking the new regulation into account in the development of new products and services, costly changes to IT-systems and services may be avoided.
Furthermore the ability to handle and process personal data in accordance with the regulation will be essential for small- to medium sized enterprises, not only to avoid large fines, but also to be eligible to partner up with large corporations, which are likely to require such capabilities as a prerequisite for any collaboration.
Insurers Beware – Are You Covering Risks Unknowingly and Unpaid?
On 11 June 2015, the Swedish Supreme Court issued a judgment that clarifies the legal effects of premium payment provisions at yearly renewals of business insurance policies – and insurers may not like the clarification.
Most Swedish business insurance policies contain suspensive provisions with respect to premium payment. Such provisions safeguard insurers from staying on risk after the expiry of the policy period in cases where the policy holder does not pay a renewal premium.
The Swedish Supreme Court has now ruled that insurers must give policy holders seven days’ written notice in order to rely on suspensive provisions. However, the Supreme Court also clarified that such written notice may be given in the form of a premium invoice, and that the written notice may also be given before the expiry of the policy period.
Most domestic insurers likely have routines in place in order to avoid staying on risk at the expiry of a policy period. For international insurers covering risks in Sweden however, the Supreme Court judgment underscores the importance of acting diligently ahead of renewals in order to avoid covering risks unknowingly.
Increase Your Understanding of International Product Liability
NorelidHolm Contributes Chapter to New Online Guide
In a globalized economy, product manufacturers export their products and source components to and from all corners of the world. Product liability issues are therefore by nature cross-border issues. This makes it crucial for all companies involved in global supply chains to have good working knowledge of product liability laws – not only in their own home countries, but also in other jurisdictions where their products and components may reach. Needless to say however, obtaining such knowledge may be easier said than done.
This is why NorelidHolm is proud to be co-author of the 2015 International Comparative Legal Guide to Product Liability, published by the Global Legal Group Ltd, London. This publication, now in its 13th edition, provides global analysis of product liability laws by leading local lawyers in 28 jurisdictions. All articles are presented in a user friendly Q&A-format, which enables anyone interested in these important issues to understand, compare and navigate the complex web of regulatory schemes across the globe.
So regardless of whether your business is manufacturing, supplying or insuring, and regardless of whether the issues you face are repair, recall or even litigation, there is now a useful tool to increase your understanding of international product liability.
The Swedish chapter, written by NorelidHolm’s insurance and reinsurance law team, can be downloaded here [PL15_Chapter-32_Sweden]
The entire guide can be accessed for free at http://www.iclg.co.uk/practice-areas/product-liability/product-liability-2015