The Serious Fraud Office & Anor v Litigation Capital Ltd

In complex confiscation and proprietary litigation, claims concerning further assets may properly be advanced within existing proceedings where the statutory and procedural framework requires an application involving all persons claiming interests in the property. The court may join persons who may assert proprietary interests so that they can be bound by the determination and given a reasonable opportunity to make representations. Under CPR 19.8A, notice may be given to unidentified non-parties claiming beneficial interests, without making them parties. A notification and barring order may also be supported by the court’s inherent jurisdiction where necessary to make the statutory and procedural scheme effective and to prevent repeated litigation.

The proceedings concerned competing claims to assets connected with a confiscation order made against Dr Smith following his conviction for fraud. The SFO, litigation funders, liquidators and other parties already involved in complex proceedings sought to introduce further assets, join additional parties, require proprietary claims to be pleaded, and obtain notification and barring orders affecting non-parties.

The application was opposed on grounds including defective service, lack of time, the earlier case-management ruling, and the contention that fresh proceedings should be commenced. The central issues were whether the further claims could be raised within the existing proceedings, whether additional parties should be joined, and whether the court had jurisdiction to bind persons who failed to notify proprietary claims.

1. Application permitted within existing proceedings. Claims concerning the Identified Underlying Assets were properly brought by application notice under Part 23. RSC Order 115 rule 7 required the SFO’s claim concerning realisable property to be made by application, and required persons holding interests in the property to be served. The court could determine and declare the interests of those persons. Parallel claim-form proceedings would duplicate the same disputes.
2. The further claims had a clear factual, legal and practical connection with the existing litigation. They concerned whether assets were realisable property under the Criminal Justice Act 1988, overlapped with existing tracing and proprietary claims, and could be managed more efficiently within the same proceedings.
3. Joinder. Under CPR 19.2(2)(b), the court had power to join persons believed to be legal owners of the assets because issues involving them were connected with matters already in dispute and their presence was desirable for resolving those issues. Joinder also gave effect to s.80(8) of the Criminal Justice Act 1988 by giving persons holding interests a reasonable opportunity to make representations.
4. Statements of case. Parties asserting proprietary claims were directed to serve properly particularised statements of case by 4 pm on 3 July 2020. Parties seeking inclusion of their claims in the Directed Trial were required to state their position by 4 pm on 13 July 2020.
5. Notification and barring orders. CPR 19.8A applied where the joined legal owners were alleged to hold assets subject to beneficial interests claimed by others. The court could notify unidentified persons without making them parties; recipients could become parties by acknowledging service and asserting a claim, but non-participants could be bound by the judgment as if parties.
6. The court ordered advertisements in The London Gazette and The Times. It also held, relying on Cameron v Liverpool Victoria Insurance, that the order did not impermissibly make unknown persons parties. If necessary, the same orders could be supported by the inherent jurisdiction and CPR Part 3.1(2)(m), consistently with Raja v Hoogstraten (No 9) and the case-management principles illustrated by Society of Lloyd’s v Jaffray.
7. Applications to adjourn were refused. Service on the existing parties and most additional parties was sufficient, and the case-management issues did not require access to the underlying records or an in-person hearing. The final order was to be agreed, with liberty to apply concerning website publication of the notice.