Fraudulent misrepresentation: High Court considers the requirement for claimants’ “awareness” of implied representations

In the context of an application to strike out or summarily dismiss a claim for fraudulent misrepresentation, the High Court has held that conscious awareness of the alleged implied representation was not necessary for the claim to have a real prospect of success at trial: Crossley & Ors v Volkswagen Aktiengesellschaft & Ors [2021] EWHC 3444 (QB).

This contrasts with recent authorities that have held that conscious awareness is a necessary part of a claimant’s case, in the context of claims brought against banks for alleged implied misrepresentations in respect of LIBOR setting (most recently Leeds City Council and others v Barclays Bank plc and another [2021] EWHC 363 (Comm) – see blog post here).

In the present case, which is the group litigation against Volkswagen (VW) arising from the “Dieselgate” emissions scandal, the judge considered those prior authorities and concluded that a single test for what amounts to the necessary awareness may not be possible.

In particular, he considered that VW’s conduct and the representations said to be implied from it (broadly to the effect that the vehicles complied with all relevant emissions regulations) were both relatively simple, whereas in the LIBOR cases the representations were found to be extremely complex and intricate and to have arisen “against the background of a web of prior communications.”  He concluded that there was a real prospect that the claimants in this case could succeed even if they were not consciously aware of the alleged misrepresentations but merely assumed the content of them from VW’s conduct, or would not have entered into the contracts had they known the truth.

An appeal against the Leeds judgment has very recently been heard by the Court of Appeal, meaning that further judicial guidance on the issue is expected shortly.

For more information see this post on our Banking Litigation Notes blog.

Upcoming webinars: freezing orders, class actions and contracts

Over the next few weeks we will be delivering a number of disputes-related webinars for Herbert Smith Freehills clients and contacts, including on: what to do when you’ve been given notice of a freezing order; the increasing risk of class actions in the UK; and how to know when you have a binding contract.

In relation to freezing orders, on Tuesday 9 June Robert Hunter will consider a string of decisions in recent years which have clarified much of the uncertainty as to what freezing orders actually prohibit, and will offer practical advice to those who want to know what they can do after being served with a freezing order.

In relation to class actions, on Thursday 18 June Kim Dietzel, Damian Grave, Kirsten MasseyMaura McIntosh, John Ogilvie and Gregg Rowan will look at a number of current developments which, taken together, increase the potential for large group actions to be brought in this jurisdiction, including competition law claims, securities claims, and claims arising out of human rights and environmental issues, and will consider what businesses can do to manage or mitigate the risks.

In relation to contracts, on Monday 22 June Tim Parkes, Chris Bushell and Robert Moore will look at the requirements for a binding contract and the problems that can arise when what appears to be an agreement is not in fact binding, or vice versa, and look at some practical steps that can be taken to minimise the risks.

All of the webinars are 12.45 – 1.45pm BST. They are 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.