Crossfire

Matheson’s technology and IP law blog

UK Court of Appeal gives leave to appeal on whether lien can be held on electronic data

February, 2014

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

In a decision that will be of interest to IT service providers, and particularly those in the cloud industry,  the UK Court of Appeal has given leave to appeal on the question of whether a lien can be held over managed electronic data.

Generally, liens allow creditors to hold tangible property in their possession until a debt is paid. Arden LJ noted that there is no authority which establishes that a lien is exercisable over intangible property, such as where a cloud provider holds data pending payment of service fees. A clarification of the law here could have considerable implications.

Even if the Court of Appeal decides that no lien can be held over electronic data, this would not prevent parties to such contracts negotiating a contractual lien. The importance of this decision will therefore lay in the context it gives to the negotiation of IT service contracts in the bargaining position of the parties.