Your Response Limited v Datateam Business Media Limited [2013] EWCA Civ 1468

On 19 November, the Court of Appeal agreed to hear an appeal from a County Court judgment relating to a dispute between a customer and its supplier who provided database management services. The particular issue that grabbed the Court of Appeal's attention was the question of liens over intangible property (in this case, the customer's electronic data).

It is a well-known principle of English law that (in certain circumstances) a party has the right to hold on to tangible property in its possession pending payment of a debt owed. For example, a mechanic is entitled to a lien over a customer's vehicle if his/her labour costs are not paid. However, there is no authority which establishes that a lien is exercisable over intangible property.

This raises the possibility of new law being made if the Court of Appeal determines that a lien can apply to both tangible and intangible property. In practical terms, such a decision would legitimise the current commercial reality whereby suppliers will invariably exercise possession of data pending payment of their fees even if they have no contractual right to do so.

However, if the Court of Appeal rules that a lien cannot be exercised over intangible property there could be a shift in bargaining power as customers could rely upon the judgment for delivery up of their data. Such a ruling would not preclude a contractual lien being agreed between the parties and we assume this is what suppliers would insist upon to close the gap.