On Tuesday 12th May, 2009 the Edinburgh Centre for Commercial Law was delighted to welcome recently retired Law Lord the Rt Hon Lord Hoffmann to deliver the Centre's annual lecture in Old College.
Interest in the lecture had been substantial with the event being fully ticketed and over-subscribed. An audience from across the country comprising senior judges (including Lord President Hamilton), advocates, solicitors, academics, and a number of students was in attendance. The Rt Hon Lord Reed gave a brief summary of Lord Hoffmann's long and distinguished legal career before Lord Hoffmann delivered his lecture on 'The Achilleas: Custom and Practice or Foreseeability'.
In contract law Lord Hoffmann's time in the House of Lords has been particularly associated with the development of the law relating to construction of contracts. The approach Lord Hoffmann takes in his speech in Investors Compensation Scheme Ltd v West Bromwich Building Society  1 WLR 896 has become central to considerations of construction and determining the intentions of the parties. In a lecture devoted to close consideration of the decision in Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas)  UKHL 48 which considered remoteness of damage in breach of contract we saw that approach applied outwith its traditional parameters.
Lord Hoffmann examined the backdrop to the case, and the very different approaches taken by the judges. And then went on to explain in detail his own approach whereby remoteness of damage was based on consideration of the intention of the parties, or as he put it in his speech in The Achilleas
"It seems to me logical to found liability for damages upon the intention of the parties (objectively ascertained) because all contractual liability is voluntarily undertaken. It must be in principle wrong to hold someone liable for risks for which the people entering into such a contract in their particular market, would not reasonably be considered to have undertaken." (para )
And given Lord Hoffmann's approach to interpretation it is perhaps unsurprising that determination of the intention of the parties should be through the application of the usual principles of construction.
During his lecture Lord Hoffmann noted the influence of various academic commentaries on remoteness of damage which were brought to the attention of the court – and noted that interaction between the related branches of the profession (judiciary, practitioners, and the academic community) was essential to the development of the legal system. After questions from various members of the audience (including the Lord President) the evening concluded with a wine reception. where it was pleasing to note practical evidence of the interaction between the branches of the profession.
We are very grateful to Lord Hoffmann for coming up to Edinburgh to deliver such a stimulating paper and can advise our readers that a revised version of the lecture will be published in the Edinburgh Law Review.