King & Ors v Stiefel & Ors

An unlawful means conspiracy claim requires concerted unlawful action which causes the claimant's loss. Allegations of agreement, impropriety or falsity cannot complete the tort where the pleaded unlawful acts caused no distinct loss.

Summary judgment may determine allegations of fraud where the claim lacks a realistic prospect of success. The court may evaluate the available evidence without conducting a mini-trial. Fraud and knowledge must be supported by properly pleaded primary facts; a claimant cannot defer essential particulars until disclosure.

A claimant who discontinued defended proceedings cannot recover their supposed value through a later claim founded on substantially the same facts without permission under rule 38.7 of the Civil Procedure Rules 1998. Relitigation may also constitute an abuse of process. A final costs assessment cannot be circumvented by reserving arguments which could and should have been decided in that assessment.

The claimants brought an unlawful means conspiracy claim against their former opponents in fraudulent misrepresentation proceedings and those opponents' solicitors and leading counsel. They alleged a common design to procure discontinuance through threats and false costs information, to obtain an inflated payment on account, and to conceal the alleged wrongdoing. They claimed the value of the discontinued proceedings, the value of a shareholding, costs paid and other losses.

The defendants applied to strike out the claim and, where applicable, for summary judgment. The alleged pre-trial threats were disavowed as causes of the discontinuance. The claimants instead relied principally on unpleaded inferred threats said to have exploited negligence and an undisclosed conflict within their former legal team.

The central questions were whether a complete conspiracy claim was or could be pleaded; whether the costs allegations impermissibly reopened a final detailed assessment; and whether recovery of the value of the discontinued claim was barred by rule 38.7 of the Civil Procedure Rules 1998 or abuse of process.

1. The claim was struck out and, where applicable, summary judgment was granted for the defendants. No complete cause of action in unlawful means conspiracy was pleaded or capable of being pleaded on the case advanced.

2. The pleaded threats could not sustain the principal claim because the claimants expressly disavowed any case that they caused the discontinuance. The inferred-threat case also failed. A coercive threat of the alleged kind required the defendants to know both of the former legal team's supposed negligence and that it had not been disclosed to the claimants. No proper basis for pleading that knowledge was identified.

3. Loss must result from unlawful acts done pursuant to the conspiracy. The costs representations did not cause the discontinuance and produced no separate loss. The costs liability arose from the discontinuance and was later fixed by detailed assessment. Alleged post-discontinuance representations did not increase that liability.

4. The allegations that the assessed costs were unrecoverable or overstated were independently abusive. Those matters could and should have been determined in the detailed assessment. The claimants deliberately withdrew them while reserving them for this action. Relitigation would undermine the final assessment and the earlier refusal of a stay.

5. Rule 38.7 of the Civil Procedure Rules 1998 applied because the claim for the value of the discontinued misrepresentation proceedings depended on proving that those proceedings would have succeeded. It therefore arose from the same or substantially the same facts. Permission would not have been granted, and pursuit of the issue against other defendants was an abuse of process.

6. As independent subsidiary grounds, counsel retained immunity from civil claims based on things said or done in the ordinary course of proceedings, except within the specific negligence carve-outs. A defendant alleged to have joined the conspiracy two years after discontinuance could not be liable for loss already caused.

7. The mediation statement relied upon as a threat remained protected by without prejudice privilege. Its robust language did not constitute the truly exceptional unambiguous impropriety required to displace that privilege. The unpleaded inferred-threat case should also be excluded because fraud, knowledge and the material inferences had not been particularised before disclosure.

This was a first-instance determination of strike-out and summary judgment applications.

• Commercial Court: The claim was issued on 5 February 2020. The defendants applied during May and June 2020 to strike it out, obtain summary judgment or obtain a stay.
• Commercial Court: The court struck out the claim and, where applicable, granted summary judgment for the defendants.