GDF Suez International Holdings v Teeside Power Holdings Ltd

The court has a wide discretion when deciding whether to split a trial. A split is inappropriate where the boundary between liability, causation and quantum cannot be drawn clearly, or where separation would not materially promote efficient resolution. The overriding objective favours the reasonably expeditious conduct of litigation, and counsel’s convenience will not ordinarily justify substantial delay. Experts should cooperate to identify material assumptions and narrow issues. Documents are disclosable where they are directly relevant to an issue raised on the pleadings, even if their ultimate evidential value is uncertain, provided disclosure is proportionate.

The claimants brought warranty claims arising from their purchase of a company connected with a power station. The remaining claims concerned technical defects, outages, insurance warranties and alternative methods of valuing the alleged loss.

The claimants opposed a split trial separating liability from quantum and sought specific disclosure of documents in which the defendants had internally valued the company for the sale. The court considered whether the trial should be deferred or divided and whether the valuation documents were relevant and proportionate to disclose.

1. Split trial. The court has a wide discretion when considering whether to divide liability and quantum. The factors identified in Electrical Waste Recycling Group Ltd v Philips Electronics UK Ltd [2012] EWHC 38 (Ch) were relevant but not exclusive. A split was not justified where the issues of liability, causation and quantum were sufficiently interconnected and the proposed separation would not provide a clear or efficient boundary.
2. The court was not prepared to defer the trial until 2014. Litigation issued in 2010 should generally be brought to trial as soon as reasonably practicable. The convenience or availability of counsel did not outweigh that objective, although the parties could apply again if later developments created genuine prejudice or made the timetable unworkable.
3. Experts should meet, where possible, to identify the material assumptions underlying the competing valuation models and narrow the issues. It was unnecessary for every assumption or item of capital expenditure to be treated as equally significant.
4. Specific disclosure. The defendants’ pleadings put in issue the value of the company as warranted. Their internal documents recording how they had calculated, assessed or estimated that value were therefore directly relevant. Disclosure was proportionate notwithstanding that there might be up to 1,000 documents and that the documents might ultimately provide little assistance. Specific disclosure was ordered.