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You CAN Get Your Data Back

If you take your car to a garage for repair, the garage can refuse to hand over the car until its bill has been paid. This is because there is a common law right, known as a lien, which gives a right in certain circumstances for a party that has lawful possession of goods to retain the goods until payment has been made. But what happens if the subject matter of the contract is an electronic database rather than goods? In the recent case of Your Response Limited v Datateam Business Media Limited that question came before the Court of Appeal.

In that case, Datateam, a publisher of magazines, had outsourced the management of its electronic database of subscribers to Your Response, which provided database management services. Things did not go well, and Datateam purported to terminate the contract. The contract was silent about termination arrangements, including what was to happen to the database on termination. Your Response issued an invoice, and refused to release the database until the invoice had been paid. Datateam engaged another company to reconstitute the database. Your Response sued for payment of the invoice, and Datateam brought a counterclaim for the cost of reconstituting the database.

In the County Court Your Response was successful, but earlier this month the Court of Appeal held that a lien could not arise in respect of the database, and that Your Response was not entitled to refuse to provide Datateam with a copy on request.

It should be noted that the data was provided electronically and not on physical media. During the contract Datateam had been able to access the database using a password. The Court of Appeal found that Your Response did not have the degree of control over the database necessary to allow it to exercise a lien. The decision may tilt the balance in such cases in favour of customers, but the moral is that both suppliers and customers should ensure that contracts for IT services address the issue of what is to happen when the contract is terminated.