Bank St Petersburg PJSC & Anor v Arkhangelsky & Ors

Article 6 does not require equality of legal representation in every complex civil trial. The question is whether the trial judge can grasp the essential facts and legal principles and conduct a fair trial, taking account of remote participation, prior assistance and practical cooperation by the parties. Fairness must remain under review; if it becomes impossible, the judge must take appropriate procedural steps and ultimately end the case. A pre-trial assessment attracts substantial appellate respect where the judge has detailed knowledge of the litigation. Under the Civil Procedure Rules 1998, the jurisdiction to award costs in advance is wider than traditional Beddoe-type cases, but remains exceptional. Alleged misconduct may be considered, yet matters whose significance cannot fairly be assessed before trial need not justify an advance costs order.

Vitaly and Julia Arkhangelsky appealed against an order of Hildyard J dated 27 November 2015. The order refused an adjournment and refused their application for approximately £1.5 million in advance costs for legal representation, expertise and disbursements. The underlying proceedings were brought by Bank St Petersburg PJSC and another against them as guarantors and principal debtors. They alleged a fraudulent conspiracy and said that, given the scale and complexity of the trial, their inability to attend in person and their lack of legal representation made a fair trial impossible. Hildyard J concluded that a fair trial could be conducted under Article 6. The central issues were whether that conclusion justified appellate interference and whether the exceptional costs jurisdiction should be exercised.

1. Article 6. Elias LJ accepted that it would have been preferable for the first-instance judge to consider the fair-trial issue before the costs issue, because the availability of a fair trial was relevant to the costs discretion. The sequence adopted did not undermine the analysis.
2. The absence of equality of representation did not itself establish an Article 6 breach. The relevant inquiry was whether the judge could grasp the essential facts and legal principles and thereby do justice. The judge had to take account of the complexity of the litigation, the difficulties of remote participation and cross-examination, previous legal and expert assistance, and the constructive contribution expected from the parties. The approach reflected the discussion of Perotti v Collyer-Bristow [2003] EWCA Civ 1521; the first-instance judge had also had regard to R (Gudanaviciene) v Director of Legal Aid Casework [2015] 1 WLR 2247.
3. The assessment was continuing rather than confined to the start of the trial. The trial judge was entitled to reserve the ability to alter the procedure, divide the trial or take other steps if fairness required it. If a fair trial became impossible, Convention jurisprudence would require the case to be brought to an end.
4. Substantial weight was due to Hildyard J’s conclusion because he had lived with the case for years and possessed a detailed knowledge which the Court of Appeal could not match at the pre-trial stage. There was no realistic prospect of showing that his conclusion was wrong, and the Court of Appeal was not in a position to gainsay it.
5. Under rule 44.2 of the Civil Procedure Rules 1998, the jurisdiction to award costs was in principle wider than traditional Beddoe-type proceedings. Nevertheless, an order for substantial costs before the facts had been determined was highly unusual, particularly in private litigation. Although the court had to consider the conduct of the parties, the alleged refusal of mediation, foreign proceedings and representations to Russian authorities could not realistically be assessed before trial. The judge’s failure to mention each matter expressly did not invalidate the decision. The refusal of permission to appeal followed.

1. Court of Appeal (Civil Division) — On 22 December 2015, Elias LJ refused permission to appeal: [2015] EWCA Civ 1420.
2. High Court of Justice, Chancery Division — Hildyard J, by order dated 27 November 2015, refused an adjournment and refused advance payment of costs, concluding that a fair trial could be conducted under Article 6.