A round-up of some recent litigation cases

Abuse of process and second actions

The Court of Appeal reviewed the principles to be applied where a claimant begins a second action in respect of the same subject matter as was ventilated in the first. The parties must comply with the Aldi requirement by informing the court in the first action that they may need to bring a second action against the same or different defendants. If the claimant fails to do so, the second action may be struck out as an abuse of process or costs sanctions may apply (Clutterbuck v Cleghorn and Otkritie Capital International Ltd v Threadneedle Asset Management Ltd).

Costs budgets and abuse

A defendant’s Precedent R was held to be an abuse of process where the figures put forward were so low that it was clear that the defendant was seeking to exploit the costs budgeting rules in the hope of obtaining a tactical advantage over the claimant. The judge approved the claimant’s budget of £244,676. The defendant was stuck with its figure of £79,371 which had been agreed by the claimant (Findcharm Ltd v Churchill Group Ltd).

Privilege

The court rejected ENRC’s claim to privilege over various classes of documents created in the course of an internal investigation. Litigation privilege does not extend to third party documents created in order to obtain legal advice about how to avoid contemplated litigation, whether civil or criminal. In any event, a criminal investigation by the SFO is not “litigation” for these purposes. Legal advice privilege applies only to confidential communications between solicitors and their clients for the purposes of giving or receiving legal advice. It does not apply to lawyers’ notes of interviews with employees (The Director of the Serious Fraud Office v Eurasian Natural Resources Corp Ltd).

Recovery of additional liabilities

Where a claimant had an ATE insurance policy before 1 April 2013, the commencement date of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), they could use the previous costs regime for appeals in the same proceedings under "top-up" amendments made to the policy after that date. The purpose of the transitional provisions of LASPO was to preserve vested rights and expectations arising from the previous law. That purpose would be defeated by a rigid distinction between different stages of the same litigation (Plevin v Paragon Personal Finance Ltd).

Limitation and adding parties

CPR 19.5(3)(a) states that the addition or substitution of a party is necessary only if the court is satisfied that the new party is to be substituted for a party who was named in the claim form in mistake for the new party. It does not envisage the concept of substitution in the alternative. The Court of Appeal overturned a decision permitting the claimant to add the defendant firm in the alternative after expiry of the limitation period (Godfrey Morgan Solicitors v Armes).