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The Commercial Litigation Journal: July/August 2011

Anna Pertoldi and Maura McIntosh contemplate some recent decisions with practical implications for various aspects of litigation including privilege, expert witnesses, and Part 36 offers

A xa Seguros SA De CV v Allianz Insurance plc (t/a Allianz Global Risks) & ors [2011] is of interest for its observations on how the courts should apply the test for litigation privilege. In this case the High Court held that certain engineers’ reports produced for reinsurers were not subject to litigation privilege; although litigation was reasonably in prospect, the reports were not produced for the dominant purpose of the litigation.

Richard Marshall and Clare Arthurs weigh up the likely shape and form of the Jackson Reforms

Finally, after all the consultations, committees and recommendations, the Jackson juggernaut has left the depot. Many of Jackson LJ’s key reforms are contained in the Legal Aid, Sentencing and Punishment of Offenders Bill (the Bill), which is now working its way through Parliament and has just completed its second reading in the House of Commons. No-one should doubt the political momentum behind the Bill; the thrust of the reforms is to save the government money at a time when cuts are at the top of the agenda.

Rani Mina considers the impact of the new Practice Direction on costs budgets

Despite popular perception, lawyers are acutely conscious of the risk of costs becoming disproportionate in litigation and the importance to clients of understanding the likely amount and when costs will be incurred. Clients often request a costs budget for the delivery of legal services and require the engagement to be managed consistently with the budget. This is soon to be formalised in a new Practice Direction (PD51F) due to commence on 1 October 2011. It will take effect as a pilot in the Technology and Construction Court and Mercantile Court, and is likely to be rolled out to other courts in due course.

David Sawtell looks at recent case law on exaggerated claims

Recent cases in the High Court and the Court of Appeal indicate that defendant insurance companies are turning to a range of procedural mechanisms to defeat, re-open and punish fraudulent or exaggerated claims. When presented with clear and plausible evidence of possible fraud, the courts are now accepting that it is in the public interest to look into this carefully. This can mean that surveillance evidence can be disclosed close to trial, where the delay has been caused by the claimant. There are now a number of cases where the courts have held that the public interest in tackling fraud outweighs the need for the finality of litigation. Finally, more cases have been brought for contempt of court, but with varying results.

Dentons

Sam Coulthard and Bryony Pawsey investigate whether lawyers’ opinions on legal capacity continue to have any value following a recent Court of Appeal decision

Prudent contracting parties often seek advice from lawyers or foreign lawyers about the capacity of the other side to enter into an agreement. The Court of Appeal’s finding in Haugesund Kommune v Depfa ACS Bank [2010] suggests that, if the advice is negligent, there may be no substantial right to damages from the lawyers. Only if the lawyers advised the client to enter into the transaction, or specifically agreed to take the risk if the transaction was invalid, will they have to compensate their client.

Michael Ward and Nicola Bridge explore the use and usefulness of freezing orders

Freezing orders prohibit dealings with specified assets, and are granted when the court is persuaded that there is a real risk that the respondent will dissipate those assets so as to render nugatory a judgment or arbitral award. An applicant must show that the respondent has assets within the jurisdiction but, once this is proven, the prohibition can extend to assets held in other jurisdictions. Any person breaching (or helping to breach) the terms of a freezing order is at risk of contempt proceedings, and ultimately faces the possibility of imprisonment.

Pannone LLP

Paul Jonson reviews submissions made to the Jackson review

This article focuses on the likely impact on commercial litigation funding of the reforms proposed in Jackson LJ’s Review of Civil Litigation Costs, which is now, of course, largely to be implemented through the Legal Aid, Sentencing and Punishment of Offenders Bill (the Bill).