“IT WAS UNNECESSARY FOR MATTERS TO BE DEALT WITH SO EXPENSIVELY”: ANOTHER COMMENT ON LACK OF FOCUS IN THE COMMERCIAL COURT

For the second time today I am writing about judicial comments on profligacy in the Commercial Court.  This time Mr Justice Andrew Baker in Invest Bank PSC v El-Husseini & Ors [2022] EWHC 894 (Comm).

“Even in the context of claims for c.£20 million, what I have just summarised is a disproportionate and unreasonable approach to the proceedings, wasteful of the parties’ and the court’s resources. It represents the kind of interlocutory battling that is readily explicable only by a failure to focus on what was sensibly required to do justice to any applications that might reasonably be pursued. It was unnecessary for matters to be dealt with so expensively.”

THE CASE

The claimant bank sought permission to amend a claim against the defendants.  Some of the defendants sought permission to set aside permission to serve them out of the jurisdiction. One defendant challenged jurisdiction, sought a stay or summary judgment on part of the claim.  The hearing took place over two days.

THE JUDGE’S COMMENTS ON THE NATURE OF THE HEARING

The Hearing

1. 1. The examination of the apparent strength of the Bank’s intended claims at this stage is summary in nature. That is clear from paragraphs 9-10 above, is very well known, and was accepted and avowed by all parties in this case. Yet they threw at the exercise: hearing bundles running to over 6,000 pages; nearly 160 pages of skeleton arguments and associated materials; and authorities bundles containing some 142 tabs and over 3,600 pages. The witness statements were improperly replete with argument, the documentary material was for the most part unopened to the court, and there did not appear to have been any attempt to follow the guidance in section F12.4 of the Commercial Court Guide that authorities bundles should only include authorities to which it was likely I would be taken at the hearing on propositions that were contentious between the parties.

1. 1. The oral argument took up two very full days, sitting until 5.30 pm on the second day, and even then there was no time left for a reply by the Bank, let alone the time on the second day the parties had imagined might be available for argument on the costs points to which I referred in passing in paragraph 8 above. I therefore directed Mr Penny QC to reduce into writing what he would have said in reply if we had sat on for another hour. I am grateful for his efficiency in producing that written note promptly following the hearing, but I do not believe (since it ran to some 28 pages and cited 7 new authorities) that it was limited as directed to a written version of what would have been Mr Penny QC’s oral reply if time had permitted.

1. 1. Costs schedules filed by Streathers Solicitors LLP, Fladgate LLP and Stewarts Law LLP representing between them the defendants other than Virtue Trustees indicate aggregate costs incurred by those defendants of c.£680,000. Though Virtue Trustees took a neutral stance on all applications and played no part in the hearing, they nonetheless attended by solicitors and leading counsel. Adding the costs (no doubt non-trivial) of Virtue Trustees’ legal representatives’ non-participatory attendance, and the costs (I envisage very substantial) on the Bank’s side, to the £680,000, I expect that over £1 million has been spent on this current exercise.

1. 1. Even in the context of claims for c.£20 million, what I have just summarised is a disproportionate and unreasonable approach to the proceedings, wasteful of the parties’ and the court’s resources. It represents the kind of interlocutory battling that is readily explicable only by a failure to focus on what was sensibly required to do justice to any applications that might reasonably be pursued. It was unnecessary for matters to be dealt with so expensively. To the extent that serious points were raised, a properly focused effort to tackle them, keeping a careful eye on the summary nature of any assessment of the merits at this stage, and making sensible use of the guidance provided by the Commercial Court Guide, should have enabled them to be dealt with at much lesser cost.

1. Two days might still have been appropriate for the oral argument, but preparation for that argument should not have required counsel to get on top of such a vast amount of material, and it should have been possible for the argument itself to be better focused, enhancing its quality and allowing more time for important points to be developed and for dialogue with the court. That said, and to be fair to counsel, the oral argument was quite well focused, and very well presented; but that served only to emphasise the huge wastefulness, of time and cost, in what had preceded it. It rather suggested that it was only the imminent prospect of having to present the oral argument to the court that engendered a proper sense of focus and perspective, too late to save the parties from incurring unreasonable and disproportionate costs.