THE COURT “REGRETTED IF NOT DEPLORED” EXCESSIVE EXPENDITURE ON JURISDICTION ISSUES: COURT OF APPEAL DECISION

In Ogale Community & Ors v Royal Dutch Shell Plc & Anor [2018] EWCA Civ 191 the Court of Appeal made observations about the need to keep applications about jurisdiction in proportion.

 “... hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating” 

THE CASE

The claimants were bringing an action against the defendants alleging loss following oil leaks in the Niger Delta.  The claimants were unsuccessful on the issue of jurisdiction, they then appealed to the Court of Appeal.  The claimants were equally unsuccessful. However the Court made some observations about the way in which the applications had been conducted.

THE JUDGMENT

“C. The approach to the issue of jurisdiction

1. Initial observations

    1. This appeal and the hearing before the Judge raise in stark form how the court should, and can properly be expected to, determine the issue of jurisdiction.

    2. The issue was considered by Lord Neuberger of Abbotsbury in VTB Capital plc v. Nutritek International Corp [2013] 2 AC 337:

82. The first point is that hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost. There is also a real danger that, if the hearing is an expensive and time-consuming exercise, it will be used by a richer party to wear down a poorer party, or by a party with a weak case to prevent, or at least to discourage, a party with a strong case from enforcing its rights.

83. Quite apart from this, it is simply disproportionate for parties to incur costs, often running to hundreds of thousands of pounds each, and to spend many days in court, on such a hearing. The essentially relevant factors should, in the main at any rate, be capable of being identified relatively simply and, in many respects, uncontroversially. There is little point in going into much detail: when determining such applications, the court can only form preliminary views on most of the relevant legal issues and cannot be anything like certain about which issues and what evidence will eventuate if the matter proceeds to trial.

    1. In the following paragraphs Lord Neuberger referred to the number of occasions on which the courts had regretted, if not deplored, the expenditure of time, effort and financial resources on jurisdiction issues, see for example, Cherney v. Deripaska (No.2) [2009] EWCA (Civ) 849 at [6] and [7]; Friis v. Colburn [2009] EWHC 903 (Ch) at [3] and [5]; and Alliance Bank JSC v. Aquanta Corp [2012] EWCA (Civ) 1588 at [4].

    2. At [89] he referred to the court’s case management powers and added:

Accordingly, judges should invoke those powers to ensure that the evidence and argument on service out and stay applications are kept within proportionate bounds and do not get out of hand.

    1. In the present case, the central issue is relatively easy to state: whether the claimants are able to demonstrate (to the standard required) that RDS owed them a duty of care (in the relevant respects). For reasons that I will come to, neither the hearing of the application nor the appeal proceeded as it should.

    2. Before elaborating on this point, I would note that this is not the type of case, referred to by Lord Neuberger in [82] of the VTB Capital case (above), where there was a risk that one party was seeking to wear down the other party by the deployment of superior resources. Both parties are well-resourced and neither has been diffident about introducing material that it believed would advance its case on the application and the appeal.

2. The practical issues arising on the application and appeal

    1. The parties deployed a large number of witness statements and exhibits before the Judge and on this appeal.

    2. At the hearing before the Judge the parties’ ‘skeleton arguments’ ran to 259 pages, plus 17 additional pages of detailed criticism of the other side’s case and 61 pages of post-hearing notes. RDS deployed 13 lengthy witness statements and 3 expert reports; and the claimants served 15 witness statements and 2 expert reports. The total length of the witness statements ran to over 2,000 pages of material, quite apart from the 8 files of exhibits.

    3. In advance of the appeal, the claimants and defendants served further skeleton arguments and additional material running to 40 pages with the permission of Jackson LJ, and RDS served a further skeleton argument of 19 pages. Following the conclusion of the hearing the Court invited the parties to serve additional written material which they had not been able to deploy in the 3 days set aside for the hearing of the appeal. The parties took this to be an invitation to set out further lengthy written submissions much of which amounted to re-argument.

    4. I mention these matters because it seems to me that the hearings of what should have been a confined issue became overburdened with paper long before the hearing of the appeal; and it is in the light of this background that the criticisms of the Judge must be seen.

    5. Although I will endeavour to deal with all the relevant material, I am firmly of the view that steps must be taken by courts to control and limit what is placed before the Court in the future, as Lord Neuberger indicated at [89] in the VTB Capital case (above).

    6. The Judge in the present case was also concerned about the nature of the hearing. He expressed himself at [10] of the judgment as follows:

I am however firmly of the view that the views of Lord Neuberger must be observed. The current approach of parties in litigation such as this is wholly self-defeating, and contrary to cost-efficient conduct of litigation. This case is an ideal example of one with ‘masses of documents, long witness statements, detailed analysis of the issues, and long argument’ being deployed on both sides. The costs burden upon the parties must be enormous, and this approach is, in my judgment, diametrically opposed to that required under the overriding objective in CPR Part 1. It would be regrettable if the only way that compliance could be ensured were to be by the court imposing a strict limit on the number of witness statements that could be lodged, and also restricting their length. Experienced legal advisers ought not to need such strictures in order to concentrate their minds. However, a fundamental change of approach is required by the parties in cases such as these for applications of this nature.

With those observations, and in particular the last sentence, I entirely agree.

  1. In a case where the central issue is whether a duty of care is owed by an anchor defendant to a claimant, one would expect the facts giving rise to that duty to be set out in a pleading and a statement of truth. If a defendant challenges the factual assertions in a Particulars of Claim it can do so in witness statements in response, with an opportunity to a claimant to provide a witness statement in reply. The parties should not be allowed to file large quantities of material, much of which is unlikely to resolve the central issue, without the leave of the court. On any view of the matter such cases need watchful case management before they come to a hearing.”