Lancaster & Ors v Peacock QC

In multi-party litigation, sample claimants should be selected by a procedure that fairly identifies the factual and legal variations requiring guidance, while avoiding unnecessary cost, delay and burden. Common issues may require only a limited number of samples. A broader sample is justified where it will provide reliable guidance for disposing of claims with differing facts. The court may adopt a sequential process, requiring documents from only an initial selection of claimants where early disclosure by all claimants would impose disproportionate burdens, including burdens arising from legal professional privilege. Case-management directions should be adjusted to maintain fairness between parties, particularly where one party has had limited direct contact with the claimants.

The court considered case-management directions for two overlapping multi-party claims concerning a film-finance tax deferment scheme. The Peacock claim involved 123 claimants. The Canaccord claim involved 33 claimants, of whom 18 were concerned with the same scheme and were to be tried with the Peacock claim. The parties agreed that the proceedings should be managed together and that other parts of the Canaccord claim should generally be stayed.

The principal dispute concerned whether all claimants should answer a questionnaire and produce identified documents immediately, or whether the questionnaire should first be answered by all claimants and documents then produced only by an initial group of sample claimants. The court also determined the appropriate numbers of initial and final sample claimants, the questionnaire wording, selection criteria and timetable.

The court preferred the claimants’ sequential proposal, subject to adjustments to protect fairness and maintain progress.

1. Purpose of sampling. Sample claimants should be sufficient to determine common issues for all claimants and, where appropriate, to provide broad guidance for resolving claims whose individual facts differ. The sample must not unnecessarily complicate the trial or materially increase its cost.
2. Sequential disclosure. All claimants were to answer the questionnaire, but only the initial sample claimants were to produce the documents identified in Annex 4. Requiring all 123 claimants to search for and produce documents at the questionnaire stage would impose an undue burden, particularly during the COVID-19 lockdown. Questions of legal professional privilege concerning advice received after investment could also require individual advice and decisions on waiver.
3. Fairness and numbers. Because Mr Peacock had no direct contact with the claimants and was relatively disadvantaged in understanding their circumstances, a larger initial sample was appropriate. Twelve initial sample claimants were to be selected by each party in the Peacock claim and six by each party in the relevant Canaccord claim. The final sample was to comprise eight claimants in the Peacock claim and four additional claimants in the Canaccord claim. Mr Peacock could select up to two Canaccord claimants as part of his Peacock selection.
4. Questionnaire and criteria. The court approved or amended particular questions, including by extending references to HMRC enquiries to challenges to the tax affairs of Invicta 43, adopting 1 February 2016 as the relevant date, and retaining the broader category of advice rather than limiting it to advice resulting from HMRC enquiries. Proposed additional questions and a further sophistication-and-knowledge criterion were refused where they were insufficiently specific, unnecessary or adequately covered by existing criteria.
5. Timetable. Questionnaire responses were due by 26 June 2020. Initial sample claimants were to be selected by 24 July, documents produced by 28 August, and final sample claimants selected by 11 September, subject to applications by 18 September. The parties’ agreed periods for individual pleadings were left in place, with liberty for them to consider whether they could be shortened.

First-instance case-management decision. No prior appellate decision is stated in the judgment.