Persons Identified in Schedule 1 to the Particulars of Claim v RSA Insurance Group Plc

In deciding how to structure a split trial, the court should adopt a pragmatic and case-specific approach. More issues may properly be included in the first trial where this is likely to promote settlement, determine factual issues sooner, reduce delay and enable appeals to be dealt with coherently. A shorter first trial is not necessarily decisive, particularly in substantial, well-funded litigation. The court should also consider duplication of evidence, the likely need for expert evidence and the fair allocation of the litigation burden. Issues involving causation and quantum may properly be reserved for a later trial where they are likely to require substantial expert evidence.

This was the first case management conference in a group claim by institutional investors against an insurer under section 90A and Schedule 10A to the Financial Services and Markets Act 2000. The claim concerned allegedly misleading or untrue published information, omissions and dishonest delay relating to misconduct and accounting practices in the defendant’s Irish subsidiary.

The parties agreed that the claim should be tried in stages but differed on the boundary between the trials. The claimants proposed that the first trial address issues concerning the defendant’s conduct and knowledge. The defendant proposed adding the claimants’ reasonable reliance issue. The court had to determine the appropriate division of issues.

1. Split trial ordered. The first trial was to determine issues 2 to 9, concerning the defendant’s conduct and knowledge, together with issue 10, concerning the claimants’ reasonable reliance. Causation and quantum were left for a second trial.
2. The decision was pragmatic rather than dependent on rigid divisions of principle. On balance, trying more issues at the first trial was more likely to facilitate settlement and would permit the factual issues concerning reliance to be determined sooner.
3. The proposed structure including reliance could realistically lead to trial in autumn 2022, whereas postponing reliance would probably delay its determination until 2023 or later. Delay was particularly undesirable because the claim had been brought late in the limitation period and the passage of time could make reliable factual findings more difficult.
4. The shorter first trial proposed by the claimants was not a particularly compelling consideration in litigation of this scale and importance. A first trial lasting approximately 25 to 30 court days would not be excessively onerous for well-funded parties.
5. Potential overlap between reliance and causation evidence did not create a sufficiently serious risk of inconsistent evidence or findings to justify postponing reliance. Some duplication was possible, but causation evidence was expected to be relatively short and self-contained.
6. Expert evidence concerning market efficiency might prove unnecessary. If required, it was not expected to occupy substantial court time. The court also considered that including reliance would produce a fairer allocation of the litigation burden, since the claimants would need to undertake disclosure, prepare witness evidence and participate fully in progressing their claims.
7. The court was not attracted by including causation in the first trial. Those issues were likely to involve substantial expert evidence and were appropriately hived off with quantum.