Court condemns “dialogue of the deaf” between opposing solicitors

Commercial Court: Co-operation call

The Commercial Court has criticised the lack of co-operation between the solicitors on either side of a dispute, describing their correspondence as “a dialogue of the deaf”.

Mr Richard Salter QC, sitting as a deputy High Court judge, said considerable resources had been wasted as a result of the approach of Hausfeld, for the claimant, and DLA Piper, for the defendant, and laid out how he expected them to act from now on.

Ventra Investments Ltd v Bank Of Scotland Plc [2019] EWHC 2058 (Comm) concerns a claim brought by joint liquidators of the claimant (VIL), a property development company, with the trial listed to begin on 15 January 2020, with a time estimate of 20 days.

The claimant applied to adjourn the trial to allow time for the defendant to give the further disclosure.

Mr Salter rejected this, although granted certain limited disclosure and amendments to the statement of case that would not jeopardise the trial date.

In a section entitled ‘The way forward’, he quoted paragraph A1.10 of the Commercial Court Guide, which says: “The court expects a high level of co-operation and realism from the legal representatives of the parties. This applies to dealings (including correspondence) between legal representatives as well as to dealings with the court.”

The judge said the applications dealt with at the hearing, and the associated witness statements and exhibited correspondence he read, have “unfortunately not demonstrated these vital characteristics”.

He explained: “BOS has been inclined to adopt an unreasonably narrow and self-serving approach to relevance in performing its disclosure obligations.

“On the other side, the large number of VIL’s applications which I have refused as unnecessary or misconceived demonstrate a lack of focus on the really important issues and on the most cost-effective and proportionate way of getting what is really necessary.

“The correspondence between Hausfeld and DLA Piper has seemed on occasions to be a dialogue of the deaf, neither side engaging properly with the logic of the other’s position.

“The result has been a considerable waste of the parties’ and the court’s resources. If proper regard had been had on both sides to the overriding objective, the application bundle for these interim applications would not have been 19 files long.”

Mr Salter stressed that, if the case was to be ready for the trial date, “both sides will need to demonstrate a much higher level of co-operation and realism”.

There was sufficient time, he said, “but there is no time to spare for unnecessary disputes”.

He told BOS to give the additional disclosure he had ordered “very promptly”, and VIL that the proposed re-amended particulars of claim he had seen was “far too long and diffuse”.

Mr Salter said: “Statements of case in the Commercial Court must be concise and should include only those factual allegations which are necessary to enable the other party to know what case it has to meet.

“Evidence should not be included, and it is usually unnecessary and unhelpful to include extensive quotations from documents or detailed particulars. What is required is to make clear the general nature of the case.

“I mention this, not only to encourage VIL to obey the rules of pleading, but also to encourage BOS not to take technical objections in response to VIL’s draft.”

The judge warned that he was “unlikely to be sympathetic to objections to VIL’s pleading which are not based on some real and substantial prejudice to BOS which could not realistically be overcome by the cooperation, realism and effort that the court expects of those appearing before it – for example, by the service of a short supplemental or additional witness statement to deal with a new point”.

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