The role of experts in legal proceedings has continued to attract comment in a number of judgments in the English courts over the past year. The decisions provide guidance on a range of issues that arise during an expert’s tenure – from the initial question as to whether expert evidence is, in fact, required to assist the court in reaching a decision, through to the conduct of the expert in providing his or her opinion and giving evidence at court.
Ann Levin and Patrick Stone have published an article in the March edition of Construction Law in which they review the most recent cases and consider the lessons learned for experts – and the parties and legal counsel instructing them. Click here to download a copy.
The Court of Appeal has held that a party was not in breach of an obligation to use "all reasonable endeavours" to procure the grant of planning permission where that obligation was subject to a qualification regarding the circumstances in which it had to pursue an appeal, ie only where planning counsel advised the prospects of success were 60% or greater: Bristol Rovers (1883) Ltd v Sainsbury's Supermarkets Ltd  EWCA Civ 160.
The decision illustrates that general obligations to endeavour to achieve some object, whether that is to use "best" or "reasonable" or (as here) "all reasonable" endeavours, will give way to more specific provisions setting out steps that must be taken, or steps that need not be taken, to comply with the obligation. In this case there was some ambiguity in the drafting of the relevant clause, which complicated matters, but nonetheless the decision illustrates the value of including such provisions in order to set boundaries on a potentially open-ended endeavours obligation.
James Farrell and Maura McIntosh outline the decision below. For more information on endeavours obligations, see our recently published guide: Endeavours obligations: How hard do you have to try? which forms part of our series of contract disputes practical guides.
In case we were all in danger of thinking the courts' approach to breaches of rules and court orders had relaxed nearly to pre-Jackson levels of tolerance, two very recent Court of Appeal decisions act as a bit of a wake-up call. As these decisions show, there is clearly continuing scope for tough decisions against those who fail to comply, particularly where they do not make a prompt application for relief from sanction. The lesson for litigating parties is obvious.
In British Gas Trading Ltd v Oak Cash & Carry Ltd  EWCA Civ 153, the court dismissed a defendant's appeal against the strike-out of its defence resulting from a two-day delay in filing a listing questionnaire pursuant to an unless order. That means a default judgment entered against the defendant for some £200,000 will stand.
Significantly, Lord Justice Jackson (who gave the leading judgment) suggested that a prompt application for relief from sanctions would have been granted; however, the delay in applying for relief had led to substantial disruption in the progress of the action, in particular the loss of the trial date, and so it was not appropriate to grant relief.
In Gentry v Miller  EWCA Civ 141, the Court of Appeal held that the lower courts were right to refuse to set aside default judgment, where the defendant had delayed in making the application, despite evidence that the claim may have been fraudulent. This decision also highlights the fact that the Denton test for relief from sanctions (outlined here) applies equally to an application to set aside default judgment for failure to file an acknowledgement of service or defence.
The two decisions are considered in more detail below.
Common interest privilege allows communications or documents that are already privileged to be shared with others who have a common interest in their subject matter without losing privilege.
The practical significance of this concept is greatly reduced as a result of the principle of limited waiver under English law, which allows privileged material to be shared confidentially with selected third parties without losing privilege as against the rest of the world – whether or not there is a common interest. Even so, the concept of common interest privilege is often referred to, sometimes in circumstances where it is inapt or unnecessary, and so causes a great deal of confusion.
Maura McIntosh has published a post on Practical Law’s Dispute Resolution blog entitled “Common interest privilege: common misconceptions” which aims to dispel some common myths about common interest privilege. Click here to download a copy of the post (or here for the Practical Law Dispute Resolution blog homepage).
The Court of Appeal has recently confirmed that security for a defendant's costs will often be granted against a foreign company who is not obliged to publish accounts, has no discernible assets and declines to reveal anything about its financial position: SARPD Oil International Limited v Addax Energy SA & Another  EWCA Civ 120.
The decision suggests that claimants should consider carefully whether to provide information about their financial standing when faced with a request for security for costs, as reticence on the matter may result in an order to provide security.
The decision is also a reminder that an order for security for costs may, in some circumstances, include the costs of third party proceedings brought by the defendant. It also contains interesting comments regarding the relevance of the parties' agreed or approved costs budgets in setting the amount of the security. Jade Hu, an associate in our dispute resolution team, considers the decision further below.
The recent decision in Property Alliance Group Limited v Royal Bank of Scotland plc  EWHC 207 (Ch) provides helpful early guidance as to the court’s approach to contested applications to transfer proceedings to the newly created Financial List. While each case will depend on its own facts, the following factors are likely to be key:
Whether the claim involves issues of general importance to the financial markets, or the need for particular expertise on the part of the judge;
Whether the claim is a test or lead case;
Whether a Financial List judge is available to conduct both the pre-trial review and the trial; and
Whether the transfer will otherwise affect the trial timetable.
The party applying to transfer should also consider what assurances can be given to the court. For example, in the instant case, the applicant addressed the final factor above by giving assurances that it did not intend to apply to adjourn or make procedural applications which might disrupt the commencement of trial.
An application to transfer proceedings to the Financial List should be made at the earliest opportunity. While the application to transfer the proceedings was successful in this case (in part because it could be done without impact on the trial timetable), the court noted that it would have been preferable for the application to have been made earlier, and warned of the potential consequences of delay in other cases. For a more detailed explanation of the guidance given by the court, see our banking litigation team's e-bulletin on the decision.
The Court of Appeal has upheld a decision to make a non-party costs order against an insurer who defended its insured in proceedings: Legg and others v Sterte and Aviva  EWCA Civ 97.
The case provides a reminder of the risk insurers face when defending proceedings on behalf of an insured. It also summarises the key factors the Court will consider when deciding whether or not to make such an order against an insurer. In this case, the decisive factor was whether or not the insurer was acting exclusively or predominantly in its own interests. Click here to read our insurance and reinsurance disputes team's e-bulletin on the decision.
In a recent decision on contractual interpretation relating to contingent convertible (or "CoCo") capital notes, the Court of Appeal has overturned the High Court's decision and held that a series of such notes issued by members of Lloyds Banking Group could be redeemed because they no longer assisted the bank in passing its core regulatory capital stress tests: LBG Capital No. 1 plc & Anor v BNY Mellon Corporate Trustee Services Limited  EWCA Civ 1257.
The case provides a useful example of the court's ability to take account of the commercial objectives of complex financial instruments such as CoCos as an aid to their construction. The court appears to have been sensitive to the fact that regulated entities have been (and continue to be) subject to an environment of ongoing change, and that where documents have been drafted with the intention of (a) helping them to meet their regulatory obligations and (b) being responsive to changes in the regulatory environment, those intentions should be respected.
The decision is also likely to be a useful authority for parties seeking to argue that there has been a mistake in the wording of contractual documents, even where such documents have been drafted with the benefit of legal advice. The court demonstrated a willingness to accept that even in a high value transaction where the documents were drafted by highly skilled legal teams, there was always the possibility of an "infelicity" in the wording which, if obviously incompatible with the commercial purpose of the transaction, could be corrected.
The Supreme Court has granted an application for permission to appeal against the decision. Please click here to read our banking litigation team's ebulletin on the decision.
On Wednesday 9 March (12.45 – 1.45pm GMT), Anna Pertoldi, Maura McIntosh and Jan O’Neill will deliver a webinar for Herbert Smith Freehills clients and contacts looking at developments in commercial litigation since our update webinar in October. Topics covered will include lessons learned from recent decisions on privilege, ADR, relief from sanctions and costs.
The webinar is part of our series of “Soundbite” webinars, which are designed to update clients and contacts on the latest developments without having to leave their desks. The webinars can be accessed “live”, with a facility to send in questions by e-mail, or can be downloaded as podcasts after the event. If you would like to register for a webinar, or to obtain a link to the archived version, please contact Jane Webber. The webinars, both live and archived, also qualify for one CPD point.