Serious Fraud Office & Anor v LCL & Ors (Ruling)

When managing a complex, phased trial, the court may revise an earlier case-management scheme where circumstances have materially changed. Relevant considerations include factual and legal overlap, the likely evidence, available hearing time, procedural fairness to affected parties, and the objective of bringing litigation to finality.

The court may include additional proprietary claims in an existing directed trial while carving out issues that cannot fairly or efficiently be determined at that stage. A party who missed a case-management deadline may seek an extension of time, supported by evidence explaining the default and justifying the extension.

This was a case-management ruling in long-running litigation concerning claims to underlying assets and tracing. Earlier orders had established a Directed Trial for January 2021 and required parties asserting proprietary claims to specified assets to notify those claims by a stated deadline.

The Settlement Parties applied for individual underlying asset claims to be included in the Directed Trial. Several respondents supported, opposed or took a neutral position on the application. The court also considered the position of a respondent who had not notified a proprietary claim to one Jersey property within time, and the possible use of summary judgment on upstream tracing issues.

1. Application granted in substance. The individual underlying asset claims were ordered to be included in the January 2021 Directed Trial in the final form proposed.
2. The earlier case-management scheme did not prevent that order. The original scheme had reflected pragmatic as well as principled considerations, and the court was required to assess whether those considerations still applied in light of changed circumstances.
3. There was substantial factual and legal overlap between the existing Directed Trial issues and the individual underlying asset claims. Issues concerning tracing, LCL’s role and the source and use of funds would materially affect both groups of claims. Inclusion would also allow affected parties to address the court on matters relevant to their own claims.
4. The court was satisfied that the claims could be tried within the available time. There was substantial agreement about the source of the assets, limited additional factual evidence was expected, the case would turn largely on legal submissions and documents, and the ten-week period was considered generous. The court would not permit lengthy statements or cross-examination from witnesses without relevant first-hand knowledge.
5. Ms Irving’s participation could be managed by careful timetabling. As her claims substantially adopted LCL’s case and she could rely on LCL’s legal team, she would not be materially disadvantaged by inclusion in the Directed Trial.
6. Upstream tracing issues concerning HPII and Mr Pelz were carved out. Those issues, including tracing into specified companies, settlements and payments, would not be finally determined in January.
7. Mr Pelz would need to apply for an extension of time to notify his proprietary claim to Antoinette Gardens. The application should explain the delay and why an extension was justified, with evidence concerning his poor health where available. The court urged serious consideration of the application in light of the parties’ earlier shared assumptions and the fact that related upstream issues would in any event remain unresolved.
8. The ruling concerned issues for final determination at trial. It did not prevent any party from applying for summary judgment, although such an applicant would face the higher test of showing that there was no realistic prospect of a claim or defence succeeding before full disclosure and witness evidence.

First-instance case-management ruling. The judgment referred to earlier case-management judgments and orders in the same litigation, including [2020] EWHC 788 (Comm) and [2020] EWHC 1280 (Comm), but no appeal was determined.