EPOQ LEGAL LIMITED v DAS LEGAL EXPENSES INSURANCE COMPANY LIMITED

A contractual variation is construed objectively by reference to what the parties agreed and their subsequent conduct. Where parties agree a price for services supplied through an existing business model, the court will not imply a different or reasonable price merely because one party misunderstood the scope of the arrangement. A unilateral mistake affects a contract only in limited circumstances, including where the non-mistaken party knew, or arguably ought to have known, of the mistake; that requirement was not satisfied here. Entire-agreement and non-reliance clauses may exclude misrepresentation claims where they satisfy the reasonableness requirement.

Epoq supplied online legal document services to DAS under a Commercial Lines Services Agreement. DAS made those services available through WTWSL, trading as BCarm, whose customers included both insured and non-insured users. Epoq later alleged that the arrangement was restricted to scheme business, that DAS had underpaid it, and that the parties’ agreement was affected by mistake or misrepresentation.

The issues included the construction and variation of the agreement, breach of contract, unilateral and mutual mistake, misrepresentation, limitation and quantum.

1. Contractual variation. The parties intended their relationship to remain governed by the Commercial Lines Services Agreement. The July 2011 email exchanges and subsequent conduct varied that agreement by providing the extended suite of documents to BCarm, for distribution under its existing business model, at £1.02 per end user. The detailed terms in a later unsigned side letter were not themselves agreed. The remaining terms of the original agreement applied unless inconsistent with the variation.
2. Scope of access and breach. The variation was not limited to scheme business. It expressly covered BCarm’s customers generally, including non-insured customers. DAS therefore did not breach the agreement by providing access through single sign-on, paying the agreed fee, or failing to pay an implied reasonable fee. The breach of contract claim failed.
3. Mistake. Epoq was subjectively mistaken about the nature of BCarm’s business, but there was no mutual mistake. DAS neither knew nor ought to have known of Epoq’s mistake. It was reasonable for DAS to assume that Epoq’s representative would review the draft DAS/WTWSL agreements, which made the non-scheme arrangement clear. The mistake claim failed.
4. Misrepresentation. DAS had not represented that BCarm was associated with a scheme. In any event, clauses 22.3 and 22.4 excluded the alleged contractual and misrepresentation liability. The exclusion was reasonable under Misrepresentation Act 1967, section 3, read with section 11(1) of the Unfair Contract Terms Act 1977. The claim was dismissed.
5. Alternative quantum. Had liability been established, the judge would have found no loss based on additional usage costs. If the parties had negotiated with full knowledge that some customers were non-insured, the likely additional fee would have been £2.50 per non-insured customer per year, producing only modest quantum; earlier claims would also have been statute-barred.