Barings Plc (In Liquidation) & Anor v Coopers & Lybrand & Ors

A trial judge may read material which is inadmissible, or may later prove inadmissible, as part of pre-reading for a lengthy civil trial. That exercise does not convert the material into evidence. It is a matter of case-management discretion, exercised in light of the judge’s need to understand the issues and the parties’ submissions. An appellate court should intervene only for obvious error or unfairness. The judge must decide the case on admissible evidence and admissions, disregarding inadmissible material when determining the issues.

Barings sought damages from several accounting firms following the collapse of the Barings group. The defendants disputed liability and relied on alleged mismanagement and contributory negligence. The trial judge proposed to read, before trial, the Board of Banking Supervision report, a Singapore inspectors’ report and an affidavit used in directors’ disqualification proceedings. Barings argued that substantial parts of those documents were inadmissible and should not be read.

The High Court judge refused permission to appeal. Robert Walker LJ refused permission on paper. The renewed application concerned whether the judge had power to read such material during pre-reading for a very long and complex trial.

1. The application was dismissed. The trial judge’s decision to read the reports and affidavit, if he considered them useful, was an exercise of case-management discretion.
2. There is no legal principle preventing a judge from reading or hearing inadmissible material. Such a rule would be impracticable, particularly where one judge determines both fact and law. Pre-reading is intended to enable the judge to understand the factual background and issues; it does not make inadmissible material admissible evidence.
3. The judge must determine the case on evidence properly adduced at trial and on admissions. The court was confident that the trial judge would disregard inadmissible conclusions and evaluative material when reaching his decision. The risk of improper influence was negligible after the anticipated lengthy hearing.
4. Lord Justice Potter agreed that the issue was essentially one of discretion. The appellate court should interfere only where there was obvious error or unfairness. He considered that greater redaction or exclusion of certain self-contained criticisms might have been desirable, but the judge was not plainly wrong, particularly given the interspersed nature of the material and the parties’ failure to mark up the Taylor affidavit as previously agreed.
5. The application was dismissed. Barings were ordered to pay the respondents’ costs, with costs assessed summarily at £13,000 where agreement did not exist, payable within 14 days.

• High Court of Justice, Chancery Division: Evans-Lombe J treated the proposed pre-reading as an order and refused permission to appeal.
• Court of Appeal (Civil Division): Robert Walker LJ refused permission on paper. On renewal, the Court dismissed the application and upheld the case-management decision.