Judge expresses anger at “flagrant non-compliance” with Commercial Court rules on pleadings

Pleadings: flouted all the principles in the Commercial Court Guide

Pleadings: flouted all the principles in the Commercial Court Guide

A High Court judge has handed out a tongue-lashing and a costs penalty over a party’s failure to stick to the rules governing the length and content of statements of claim laid down in the Commercial Court Guide.

In the latest of a series of court rulings bemoaning overly long pleadings, Mr Justice Leggatt said that unless adverse costs orders are made “in cases of flagrant non-compliance, practitioners who are well aware of the principles of pleading and the provisions of the Commercial Court Guide will continue to overlook them, as happened here”.

He was ruling in Tchenguiz & Ors v Thornton UK LLP & Ors [2015] EWHC 405 (Comm), which involves allegations that the defendants conspired to induce the Serious Fraud Office to investigate the claimants on a false basis by the unlawful means of making statements which the defendants did not believe to be true.

The issue of ever lengthier pleadings was considered by the Commercial Court long trials working party, which reported in 2007 and led to changes to the Commercial Court Guide that statements of case should not exceed 25 pages unless the court was presented with a very good reason to allow a longer one, along with guidance on what they should include.

Leggatt J said: “The particulars of claim which have been served in the present case flout all these principles. They are 94 pages in length. They include background facts, evidence and polemic in a way which makes it hard to identify the material facts and complicates, instead of simplifying, the issues.

“The phrasing is often not just contentious but tendentious. For example, the defined term used to refer to three of the defendants is ‘the conspirators’. Nor can headings such as ‘the plot’ and ‘the plot evolves’ be supposed to be ‘in a form that will enable them to be adopted without issue by the other party’ [as per the Guide].”

On top of this, the claimants did not seek the court’s permission to serve a statement of case longer than 25 pages; a retrospective application was made two months after it was settled following the defendants’ objection.

The particulars were signed by four counsel and the judge required them each to explain whether they were aware of the requirements of the Commercial Court Guide.

He recorded: “From their answers, it appears that the two most junior counsel (one of whom is a criminal practitioner) were not aware of the relevant requirements of the Commercial Court Guide when they assisted in drafting the particulars of claim.

“The two senior counsel, Mr Romie Tager QC and Mr Jonathan Crystal, have said that they were conscious of the relevant provisions of the Guide when they embarked on drafting the particulars of claim but that, by the time they completed this task which took place over a period of more than three months, they were no longer conscious of the need for an application to be made for permission to serve particulars of claim longer than 25 pages.”

For his explanation, Hardeep Nahal, a partner at the claimants’ firm, McGuireWoods, told the court: “The length of the document was considered necessary to make sufficiently clear to the defendants (and ultimately the court) the extremely serious allegations being raised by the claimants against the defendants.”

The judge responded: “It must be abundantly clear to anyone who is accused in a statement of case of fraudulent conduct that extremely serious allegations are being made against them. It is unnecessary to repeat the assertion that the person has been fraudulent again and again on page after page in order to convey this fact.”

He rejected arguments that the particulars did not have to be re-pleaded, ordering that the they be struck out and the costs of drafting them disallowed, and that fresh particulars no longer than 45 pages should be served within 21 days.

Leggatt J concluded: “I have shown this judgment in draft to the judge in charge of the Commercial List [Mr Justice Flaux], who endorses the principle that flagrant disregard of the guidance applicable to statements of case may lead to adverse costs orders.”

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