The Stax Claimants v Bank of Novia Scotia Channel Islands Ltd. & Ors

In complex multi-party litigation, lead cases may be selected where they provide a fair and proportionate means of determining the real issues without investigating every individual claim in full. The court must remain able to consider relevant evidence from non-lead cases and must avoid treating the selected cases as an artificial limit on the evidence. Funding and after-the-event insurance arrangements are relevant where a case-management direction might cause claimants to abandon otherwise viable claims. The interests of additional parties must be considered, but should not dictate the appropriate procedure between claimants and defendants unless injustice would result. Cost-sharing should not be imposed where the cases lack sufficient common factual ground or the exercise would be disproportionate. The court deferred final selection pending further evidence and information.

The proceedings involved approximately 45 claimants pursuing claims against the defendants, with contribution claims by the defendants against numerous additional parties. At an earlier case management hearing, the parties had generally considered that a number of lead cases might provide an efficient route to resolution.

At the present case management conference, the court was asked to address further disclosure and whether to select lead cases, select cases for an initial trial phase, stay claims against additional parties, or allow all claims to proceed together. The claimants raised difficulties concerning their after-the-event insurance, which might not cover adverse costs arising from selected lead cases. The court also considered threatened strike-out or summary judgment applications and the absence of any viable cost-sharing arrangement.

1. Disclosure was not determined because the defendants had insufficient time to respond and there was inadequate time at the hearing. The issue was deferred to a later date.

2. A trial of all 45 actions should be avoided if justice could fairly be achieved by another procedure. Lead cases remained the most obvious approach to identifying and deciding the real issues between claimants and defendants without investigating every individual claim in depth. The use of lead cases would not improperly restrict the evidence: relevant evidence from non-lead cases or other witnesses could still be placed before the court.

3. The court nevertheless had to consider the practical effect of the claimants’ insurance arrangements. If adopting lead cases would in practice force claimants to abandon their claims, that would be a powerful reason to reject the approach because forcing viable claims to be abandoned would be inconsistent with dealing with the litigation justly. A possible alternative was to select cases for an initial hearing while allocating generic preparation costs across the claims, but that proposal required further refinement.

4. It was inappropriate to impose cost-sharing on the additional parties. There was insufficient common factual ground to identify issues for which shared costs would be just, and the work required to establish such ground would be disproportionate to any saving.

5. The interests of the additional parties were a factor in case management but should not dictate the procedure between claimants and defendants unless injustice would result. Claims against additional parties might appropriately be stayed, particularly where a collective claimants’ attack would otherwise place a disproportionate burden on a small number of additional parties. Any additional party wishing its claim to proceed should be permitted to do so.

6. No final ruling was made on lead cases, selected cases or a full trial of all claims. A further case management conference was directed for January 2007, by which time the claimants were expected to provide evidence about their insurance position and the parties were expected to address outstanding information and other case-management matters.