A round-up of some recent litigation cases – January 2019

We've brought together a round-up of some recent litigation cases that may be of interest.

23 January 2019

Stay of proceedings

In the Commercial Court the parties must inform the court about any agreed extension of time under the CPR. It was not open to the parties to enter into an indefinite stay at the outset of proceedings, and they should have informed the court of the stay in any event. Accordingly the agreed stay was not effective to enable the defendant to challenge jurisdiction out of time, and he must be treated as having accepted that the court had jurisdiction in accordance with CPR 11(5) (Griffin Underwriting Ltd v Varouxakis (Free Goddess)). 

Varying a costs budget

Master Davison allowed an upward variation of the disclosure phase of a costs budget because unexpectedly voluminous disclosure by the defendant was a "significant development in the litigation" within the meaning of PD 3E.7.6 (Al-Najar v The Cumberland Hotel (London) Ltd). 

Open justice and access to court documents

Courts should grant requests by non-parties for access to documents from the court records under CPR 5.4C(2) unless there is a good reason not to, such as confidentiality or security issues. Documents read by judges during or before the hearing are an integral part of the proceedings, even though attendees at court might be unaware of their content and relevance. Green LJ ordered disclosure of documents before the court in judicial review proceedings (R (British American Tobacco) v Secretary of State for Health - see this briefing about Dring v Cape Intermediate Holdings Ltd, which was overturned by the Court of Appeal. An appeal to the Supreme Court is due to be heard on 18 February 2019). 

Litigation privilege

Litigation privilege covers communications that seek advice or information for the sole or dominant purpose of "conducting" adversarial litigation, and this includes making decisions about whether to settle but not the conduct of litigation more broadly. As a result, privilege did not apply to emails between a company’s board members which had been prepared to discuss a commercial proposal for the settlement of a dispute (WH Holding Ltd v E20 Stadium LLP). 

Communications with experts

A claim to litigation privilege over correspondence with two art experts was rejected because the dominant purpose test was not satisfied. Sotheby’s argued that the dominant purpose of the expert reports and communications with the experts was the litigation which ensued between it and the seller of the dubious painting. However, the contract of sale required written evidence of doubts about the authenticity of the painting. Sotheby’s had a commercial decision to make about rescinding the contract with the buyer and it also had in mind potential litigation with the seller. The experts’ reports would be used for both purposes (Sotheby's v Mark Weiss Ltd, discussed in this briefing).

Privilege and dissolved companies

Documents in client files held by the defendant solicitors in respect of a dissolved Cypriot company were protected by legal professional privilege where an application to restore the company to the register could still be made. The policy considerations underlying the principle "once privileged, always privileged" compelled the court to maintain the privilege unless and until there was no prospect of the privilege being enforced by the person entitled to it (Addlesee v Dentons Europe LLP). 

Legal advice privilege

Where a communication was sent to lawyers and non-lawyers, if the dominant purpose was to seek advice from the lawyer and others were copied in for information only, then it was privileged, regardless of the recipients. If sent to the non-lawyer for a commercial comment, but sent to the lawyer for legal advice, it would not be privileged unless it or the non-lawyer's response disclosed or might disclosure the nature of the legal advice sought and given (R (on the application of Jet2.com Ltd) v Civil Aviation Authority).

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