Gubarev & Ors v Orbis Business Intelligence Ltd & Anor

A split trial is a discretionary case-management decision governed by the overriding objective. The court must balance prospective savings against the risk of increased aggregate costs, duplication, delay, witness strain, prejudice, fragmentation and appellate difficulty. In defamation claims by trading bodies, Defamation Act 2013, section 1(2), requires serious financial loss, which is distinct from the later quantification of special or general damages. Although serious financial loss may be inferred, adequate evidence is required. A single trial is preferable where the evidence substantially overlaps, the proposed division is difficult to define, and a split would impair the opposing party’s ability to test liability and negotiate settlement. The assessment is fact-sensitive and must be directed to resolving the whole case fairly, quickly and efficiently.

The claimants brought a libel claim concerning publication of part of a memorandum on the BuzzFeed website. The issues included responsibility for publication, meaning, serious harm, serious financial loss under section 1(2) of the Defamation Act 2013, qualified privilege and damages.

The claimants applied under Civil Procedure Rules 1998, rule 3.1(2)(i), for a first trial dealing principally with liability and a later trial dealing with the financial claims of the corporate claimants. The defendants opposed the application, relying on overlap between the evidence, duplication, delay and prejudice. The central issue was whether the proceedings should be divided into separate trials or determined at one trial.

1. Application refused. The court directed the parties to proceed towards a single trial of all issues and, if necessary, to return to a case management conference. Revised costs budgets were also to be prepared.
2. Under Civil Procedure Rules 1998, rule 3.1(2)(i), the court may order a separate trial of any issue, but must exercise that power consistently with the overriding objective in rule 1.4. The guidance in Electrical Waste Recycling Group Ltd v Philips Electronics UK Ltd [2012] EWHC 38 (Ch) was adopted. Relevant considerations included prospective costs savings, trial preparation and management, witness inconvenience, complexity, prejudice, the feasibility of a clean split, duplication, delay, bifurcated appeals, mediation and settlement.
3. For the purposes of Defamation Act 2013, section 1(2), serious financial loss is distinct from special damages. It may be inferred from evidence, but the court would need sufficient evidence concerning the corporate claimants’ businesses and the alleged adverse trading consequences. The evidence required for that threshold issue overlapped materially with the evidence relevant to quantifying the claimed losses.
4. The proposed division was difficult to formulate and had changed repeatedly. A single trial would not create excessive complexity or impose an undue burden on the trial judge. By contrast, a split risked duplicated factual evidence, additional cost and delay, continuing strain on the defendants, and pressure to settle before the financial claims had been properly tested.
5. Balancing the competing considerations, the prejudice to the defendants and the risks of duplication and delayed final resolution outweighed the possible saving if liability failed. The claimants’ interest in prompt vindication did not alter that conclusion.