Supreme Court holds English court has jurisdiction over tort claim where conspiracy hatched in England

The Supreme Court has held that the place of the event giving rise to damage in a claim alleging the tort of conspiracy to injure by unlawful means is where the conspiratorial agreement was made. As that was England, the English courts had jurisdiction: JSC BTA Bank v Khrapunov [2018] UKSC 19.

More generally, the decision confirms that when looking for the place of the event giving rise to damage, the court should focus on the events which set the tort in motion.

The decision is also of interest for its consideration of what amounts to unlawful means for the purposes of the tort of conspiracy to injure by unlawful means. That part of the decision will be considered in a separate blog post to be published shortly.

The Supreme Court’s decision upholds the Court of Appeal’s decision on both issues. For our earlier posts on the Court of Appeal’s decision see here and here. Continue reading

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Manual disclosure review ordered due to concerns over party’s computer assisted review

In a recent High Court decision, the court expressed concerns regarding the claimants’ computer assisted disclosure review and ordered them to carry out a manual review of a substantial number of documents that had been excluded from review on the basis of a computer assisted sampling of the documents: Triumph Controls UK v Primus International Holding [2018] EWHC 176 (TCC).

In a number of judgments in recent years, the courts have given in principle approval of computer assisted reviews (CAR), including predictive coding (see here and here). The present decision illustrates that the court is prepared to delve into the detail of how such programmes have been set up and used in order to assess the adequacy of a party’s disclosure.

It also serves as a reminder of the importance the courts place on transparency in such processes. Where a party fails to engage with its opposing party adequately in advance of designing and carrying out its disclosure searches, it risks being ordered to redo some or all of the review, even if that involves substantial additional time and costs. Continue reading

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Article published – Alternative dispute resolution reform: one size does not fit all

On 6 March, the Civil Justice Council held a workshop to discuss the recommendations made in its interim report on ADR, which was subject to consultation late last year. The interim report expresses concerns regarding a perceived underuse of ADR and suggests corrective measures, including a power for the court to determine whether costs sanctions should be imposed for unreasonable conduct relating to ADR (such as an unreasonable refusal to mediate) not only at the end of a case, as currently, but during the matter when the decisions regarding ADR are taken.

Jan O’Neill has published a post on Practical Law’s Dispute Resolution blog in which she questions how realistic the suggestion of “midstream” assessment of parties’ conduct relating to ADR would be in practice. She suggests that many of the concerns expressed in the report as to the underuse of ADR are not relevant to larger, complex claims, and urges the working group to tailor any final recommendations to the specific courts or dispute types for which they are needed and practicable. Click here to read the post (or here for the Practical Law Dispute Resolution blog homepage).

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EU’s revised proposals for enforcement of judgments post-Brexit

On 15 March, the European Commission published a revised version of the draft withdrawal agreement it had previously published on 28 February 2018 (see our summary of the original terms relating to jurisdiction, choice of law and enforcement of judgments here). The revised version contains a significant change regarding continuation of the current arrangements for enforcement of judgments, bringing the EU’s position closer to that of the UK on this issue.

The EU’s initial draft agreement provided that the current rules on enforcement of judgments, under the Recast Brussels Regulation, would apply only to judgments given before the end of any transition period. In contrast, the revised draft provides that those rules would apply so long as the proceedings were instituted before the end of that period.

This is a positive step but, in contrast to the UK’s position, there is no provision for the current rules on enforcement to apply where a jurisdiction agreement was entered into before the end of the transition period, if proceedings were commenced after it. 

A further version of the draft withdrawal agreement has been published today (19 March) indicating which areas of text are agreed and which remain subject to discussion (though as noted in our separate blog post on the key areas of agreement, linked here, nothing is agreed until everything is agreed). Discussions are said to be ongoing in relation to the provisions on jurisdiction and enforcement, in contrast to the provisions on choice of law which form part of the text marked as having been agreed.

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Part 36 offers to settle: some lessons from recent decisions

This post discusses practical points arising from four recent decisions relating to Part 36 offers – though of course each case will turn on its facts and so the points outlined will not necessarily be of universal application.

(1) A term as to costs which is (even slightly) inconsistent with the effect of Part 36 itself may invalidate the offer: James v James [2018] EWHC 242 (Ch).

(2) If making a second or subsequent Part 36 offer, there are ways to preserve (or lose) the costs protection of earlier offers: Ballard v Sussex Partnership NHS Foundation Trust [2018] EWHC 370 (QB).

(3) If making a payment on account of a claim, it will reduce the amount of any previous Part 36 offer unless stated otherwise: Gamal v Synergy Lifestyle Ltd [2018] EWCA Civ 210.

(4) A claimant’s Part 36 offer to accept 90% of the claim may well be effective if the claim succeeds in full: JMX v Norfolk and Norwich Hospitals NHS Foundation Trust [2018] EWHC 185 (QB). Continue reading

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Commercial Court finds non-party not entitled to assert litigation privilege

The Commercial Court has held that a non-party who controlled litigation was not entitled to assert litigation privilege against the party it was controlling and who was the party to the proceedings: Minera Las Bambas SA v Glencore Queensland Ltd [2018] EWHC 286 (Comm).

The decision is a reminder that litigation privilege belongs to the party to the litigation. A third party who controls litigation but is not itself party to the litigation may have other rights in respect of the material covered by litigation privilege in the hands of the litigating party, such as joint or common interest privilege. However, these rights will not allow the third party to assert privilege as against the litigating party.

The decision also contains a puzzling suggestion that the claim to privilege failed for the additional reason that the documents were prepared for use in other proceedings (in this case Peruvian proceedings) rather than the current proceedings in which the right to privilege was asserted. It is not clear, however, why that should be relevant: litigation privilege will ordinarily apply where documents have been prepared for the dominant purpose of any litigation that was in reasonable contemplation at the relevant time, whether or not such litigation ultimately ensued. As it’s put in Charles Hollander’s Documentary Evidence, litigation privilege “can be claimed in this jurisdiction in relation to litigation in foreign courts, even if the foreign court knows no such privilege”.

We understand that the Court of Appeal has refused permission to appeal against the decision. Continue reading

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High Court finds there is no power to stay in favour of prior proceedings in non-EU court where there is an English non-exclusive jurisdiction agreement

The High Court has held that where there was a non-exclusive jurisdiction clause in favour of an EU member state (England), and proceedings were commenced first in a non-member state (the Isle of Man), the English court had no power or discretion to decline jurisdiction: UCP Plc v Nectrus Limited [2018] EWHC 380 (Comm).

The recast Brussels Regulation contains new powers (under articles 33 and 34) to stay proceedings in favour of a non-member state where the non-member state proceedings are first in time. The court held that those provisions do not apply where jurisdiction is taken on the basis of a jurisdiction clause, even if the clause is non-exclusive.

Assuming the same approach is adopted in other cases, this will mean a party can insist on pursuing proceedings in a member state under a (non-exclusive) jurisdiction agreement, even where there are already proceedings in a non-member state which are not in breach of the jurisdiction clause.

The decision has potentially broader implications. If the judge is correct and the only power to stay in favour of a non-member state is where the facts come within article 33 or 34, this will mean there is no discretion to stay in other circumstances. So, where the proceedings in the non-member state were second in time, the English court could not defer to that court presumably even if there was an exclusive jurisdiction clause in favour of the non-member state or the proceedings concerned eg foreign land. Before the recast Brussels Regulation entered into force, the English courts held on a number of occasions that they had the power to stay in these circumstances – see for example the discussion in Plaza BV v The Law Debenture Trust Corporation [2015] EWHC 43 (Ch) (post) and Ferrexpo AG v Gilson Investments Ltd [2012] EWHC 721 (Comm)  (post). If UCP is correct and there is now no power to do so unless the non-member state proceedings are first in time, the only residual power the court will presumably have is to stay on case management grounds in “rare and compelling cases” (as in Reichold Norway SA v Goldman Sachs International [1999] 1 All ER (Comm) 40).

In the present case the court also considered, obiter, that even if the common law had applied, given the non-exclusive jurisdiction clause, strong, or possibly very strong, reasons would be required to displace the English proceedings. Continue reading

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Supreme Court decision makes it harder for directors to establish limitation defence where they have benefited from breach of fiduciary duty

For the purposes of limitation, directors of a company are treated as trustees, given that they owe fiduciary duties to the company. There is a six year limitation period for actions by a beneficiary to recover trust property or in respect of any breach of trust (section 21(3) of the Limitation Act 1980). However, there is no limitation period where the trustee was fraudulent, or where the action is to recover trust property or its proceeds in the possession of the trustee or previously received by the trustee and converted to his or her use (section 21(1)(b)).

In a recent case the Supreme Court held that, as directors are fiduciary stewards of the company’s property, they are treated as being in possession of that property from the outset. Accordingly, where directors have benefited from the misappropriation of company property, they will not be entitled to a limitation defence in claims by the company – regardless of whether the directors ever had legal or beneficial ownership of the property: Burnden Holdings (UK) Ltd v Fielding [2018] UKSC 14.

For more information see this post on our Private Wealth and Trust Disputes Notes blog.

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Court of Appeal finds that factual information received by solicitor in course of acting for client was not privileged

In a recent decision, the Court of Appeal held that a solicitor could not object on grounds of privilege to giving evidence, where the questions related to factual information received by the solicitor from third parties in the course of acting for his client: Kerman v Akhmedova [2018] EWCA Civ 307.

The decision is based, at least in part, on the well-established principle that communications with a third party are not covered by legal advice privilege, which is confined to lawyer / client communications for the purpose of giving or obtaining legal advice. Third party communications can only be privileged, if at all, under litigation privilege, which applies to documents or communications prepared for the dominant purpose of litigation which is in reasonable contemplation. Here, the information in question was obtained by the solicitor from third parties, and did not relate to contemplated litigation. Accordingly, there was no basis for a claim to privilege.

The Court of Appeal’s decision appears to go further, however, suggesting that a solicitor cannot refuse to answer questions on grounds of privilege where the client would not be able to do so. That statement is uncontroversial if it is limited to where, as in this case, the information is obtained from third parties in circumstances where litigation privilege is not available. If however it is intended to include situations where the solicitor has obtained the information solely by means of a privileged communication from the client, that is a much more contentious proposition, going beyond authorities to date, and would appear to risk undermining the privilege.  Continue reading

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Supreme Court refuses to validate service retrospectively where there was no prior agreement to email service

In a recent decision, the Supreme Court declined to order that steps taken by the claimant to draw the claim form to the attention of the defendant by email should amount to good service despite the claimant (a litigant in person) having failed to jump through the necessary procedural hoops for email service. The result was that the claim form expired unserved in circumstances where a fresh action by the claimant was likely to be time-barred: Barton v Wright Hassall LLP [2018] UKSC 12.

This case acts as a reminder that proceedings may be served by email only if the party to be served (or its solicitor) has previously indicated in writing that it is willing to accept service by email, which will include where the solicitor’s notepaper sets out an email address and states that it may be used for service. The Supreme Court in this case suggested that this provision may be ripe for reconsideration by the Civil Procedure Rules Committee, but in the meantime that remains the rule.

The decision also illustrates that litigants in person cannot generally expect greater indulgence than legally represented parties in terms of compliance with rules and court orders. As Lord Sumption put it, “unless the rules and practice directions are particularly inaccessible or obscure” (which he did not consider was the case here), it is reasonable to expect litigants in person to familiarise themselves with the applicable rules.  Continue reading

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