IXIS Corporate & Investment Bank v WestLB Ag & Ors

The power to consolidate proceedings or order claims to be tried together is discretionary. It must be exercised to further the overriding objective, including expedition, fairness, proportionality and the saving of time and expense. Significant factual or legal overlap does not require consolidation. The court may refuse consolidation where participation in an imminent trial would make it impossible for a party to prepare fairly, particularly where the application is culpably late. A risk of inconsistent findings may be outweighed by the need to preserve an existing trial date and avoid procedural unfairness.

WestLB applied to consolidate the existing proceedings brought by IXIS concerning a Box Clever securitisation with two proceedings brought by WestLB against Nomura. The first WestLB proceedings concerned alleged negligence in relation to the original bridging loan. The second concerned alleged negligence and misrepresentations relating to financial models and assumptions later used in the securitisation.

The application was heard after an earlier hearing at which the court required further information about the pleaded issues. By the second hearing, the court accepted that the IXIS proceedings and the second WestLB proceedings involved substantial factual and legal overlap. The central issue was whether those proceedings should nevertheless be consolidated or tried together without postponing the imminent IXIS trial.

1. WestLB’s application to consolidate the IXIS proceedings with the second WestLB proceedings, or to have them tried together, was dismissed.

2. Under CPR Part 3.1(g) and (h), the court has a discretionary power to consolidate proceedings or try two or more claims on the same occasion. The discretion must be exercised in accordance with the overriding objective, so that cases are dealt with expeditiously, fairly and proportionately, while saving expense and time.

3. The January 2008 trial date was a primary consideration. The IXIS proceedings were already at an advanced stage, the trial had previously been delayed, and the professional reputation and honesty of individuals were in issue. It would therefore be unfair and unjust to postpone that trial.

4. Although there was significant overlap in the factual and legal issues, consolidation would require Nomura to participate fully in the imminent trial. Nomura had not yet pleaded its defence and would need to investigate disclosure, identify witnesses, consider expert evidence and familiarise itself with extensive material. It could not physically prepare adequately within the six months available.

5. The risk of inconsistent findings in separate trials was real, but it was outweighed by the considerations of fairness, case management and the preservation of the existing trial date. The lateness of WestLB’s application, which was accepted to be culpable, reinforced that conclusion.