Lexi Holdings (In Administration) v Pannone & Partners

Requests for further information under CPR Part 18 must be confined to information that is reasonably necessary and proportionate to enable a party to prepare its case or understand the case it must meet. The court should distinguish between matters requiring pleading clarification and matters properly left to evidence or submissions. Pleadings need to identify the general nature and parameters of the case; they need not provide every evidential detail, particularly where disclosure and witness statements will clarify the issues. Parties and legal teams must cooperate to further the overriding objective and avoid disproportionate expenditure on procedural disputes.

The claimant, an administrator-owned company, brought a claim exceeding £42 million against its former solicitors concerning payments made during the conduct of a secured bridging-loan business. The defendants applied under CPR 18.1 for further information about the re-amended particulars of claim and earlier replies.

The requests concerned alleged unauthorised payments, accounting treatment, breach of professional rules, loss, and an alleged duty to report suspected wrongdoing to the claimant’s board, lenders, auditors or the police. The central issue was whether the information sought was reasonably necessary and proportionate for the defendants to understand and prepare their case.

The application was determined by applying the necessity and proportionality test in paragraph 1.2 of the Practice Direction to Part 18.

1. Scope of the requests. The CPR regime is more restrictive than the former entitlement to particulars under the RSC. Pleadings must mark out the parameters of the dispute and identify the general nature of the case, but excessive particulars may obscure rather than clarify the issues. Disclosure and witness statements reduce the need for detailed pleading.
2. Requests refused. Requests seeking a comprehensive breakdown of matters already sufficiently pleaded, matters for evidence or submissions, repetition of information already supplied, or details unnecessary to prepare the defence failed the necessity or proportionality test. This included most requests concerning the alleged duties, the alleged whistleblowing to the board, Barclays’ reporting accountants, auditors and police, and the source of specified payments.
3. Requests granted. Further information was necessary concerning the alleged loss arising from payments to other solicitors and a receiver, the accounting treatment of certain payments and its causal connection with loss, the extent to which the claimant would depart from earlier factual findings, what Mr Palmer would have done if informed, and losses said to arise from transactions under sections 320 and 330 of the Companies Act 1985.
4. Conduct of the litigation. Under CPR 1.3, parties and their legal teams must assist the court in furthering the overriding objective. Neither side had acted appropriately in allowing a procedural dispute to generate disproportionate costs and court time.

The claimant was directed to provide the information sought by requests 3, 9 to 12, 14(v) to (vii), 18(ii) in relation to Mr Palmer, 25, 28 and 30. The remaining requests were refused.