F&C Alternative Investments (Holdings) Ltd. v Barthelemy & Anor

The court has a discretion whether to hand down a reserved judgment after the parties settle. That discretion requires the court to balance the parties’ interests and the public interest in finality and conserving resources against the public interest in publication.

Publication may be required where the judgment contains material findings relevant to financial-services regulation, vindicates or criticises witnesses in relation to serious allegations, or addresses significant legal issues. The draft-judgment procedure must not become a means of giving parties further material to facilitate settlement. A partial judgment may be inappropriate where the legal issues depend on the factual findings.

Following a lengthy trial concerning the operation of F&C Partners LLP, the parties reached a settlement conditional upon the court not handing down its prepared judgment. The defendants applied for the judgment to be withheld, with support from F&C.

The judgment dealt with claims concerning put-option rights and petitions under section 994 of the Companies Act 2006. It also contained detailed factual findings, criticisms and exonerations relevant to the Financial Services Authority, together with analysis of limited-liability partnership law, fiduciary obligations and contractual implication.

The central issue was whether the private and settlement-related interests of the parties outweighed the public interests favouring publication.

1. The application was dismissed and the judgment was ordered to be handed down. The court’s discretion required a careful balancing of the parties’ strong interest in bringing hard-fought private litigation to an end, the public interest in avoiding further court expenditure, and countervailing public interests in publication.

2. The practice of circulating a draft judgment for correction does not exist to provide parties with additional material to assist settlement. Here, the parties negotiated with knowledge of the draft judgment and deliberately made their settlement conditional upon the court exercising its discretion in their favour. That conditional arrangement did not determine the exercise of the court’s discretion.

3. Publication was strongly supported by the public interest in enabling the Financial Services Authority to assess detailed findings concerning approved persons and entities. An agreed statement could not satisfactorily substitute for the court’s full findings, including criticism of aspects of the defendants’ conduct.

4. Publication was also justified because the trial had involved serious public allegations against witnesses. The judgment’s findings that several witnesses were honest and credible, and its rejection of wider conspiracy allegations, were matters in which persons other than the parties had a legitimate interest.

5. The judgment addressed legal issues of wider significance, including the operation of the Limited Liability Partnerships Act 2000, the application of section 994 of the Companies Act 2006, contractual implication, and fiduciary obligations. The court considered it desirable that those conclusions should be publicly available.

6. A partial judgment would not have been appropriate because the legal issues could not properly be understood without the underlying factual findings. The court therefore proceeded to hand down the judgment in full.

Not an appeal. The judgment itself records that the parties made no application for permission to appeal this ruling. The substantive proceedings were subsequently handed down under [2011] EWHC 1731 (Ch).