Frasers Group PLC v Saxo Bank A/S & Anor

Applications to amend a pleading are assessed according to whether they are late, very late or neither. For a late application that is not very late, the proposed amendment must have a real, rather than fanciful, prospect of success. The court should not conduct a mini-trial. The merits threshold is satisfied unless the proposed case is legally bound to fail or its factual basis is entirely without substance.

Once that threshold is met, the court evaluates where the balance of injustice lies. Relevant considerations include the explanation for delay, the nature and significance of the amendment, wasted work, disruption, and prejudice to the parties and other litigants. A poor explanation is not invariably decisive.

Frasers Group PLC brought a damages claim against Morgan Stanley arising from a margin call and the closure of trading positions in Hugo Boss options. Morgan Stanley applied for permission to amend its defence shortly before trial to allege failures to mitigate and a credit in respect of counterfactual trades. The proposed amendments could substantially reduce the claim.

The application was opposed on grounds of delay, lack of expert-evidence permission and prejudice. Most amendments were agreed, but two remained contested. The court also determined consequential costs, summarily assessed the application costs, and refused permission to appeal.

1. Permission to amend granted. The amendments were late but not very late, because granting them would not cause the trial date to be lost. They were clear and sufficiently particularised.
2. The applicable merits threshold required Morgan Stanley to show a real prospect of success. The court did not conduct a mini-trial. The proposed case was not legally bound to fail, and its factual basis was not entirely without substance.
3. The argument that the amendments required expert evidence outside the existing permission did not defeat the application. The consent order permitted expert evidence concerning options-trading quantum, including the feasibility and financial consequences of alleged or comparable trades. Once the defence was amended, the necessary evidence fell within that broad scope.
4. The final decision depended on the balance of prejudice. The absence of a satisfactory explanation for the earlier delay was relevant but not decisive. The claimant’s expert had sufficient time to address the issues, and the resulting disruption was limited. That prejudice was outweighed by the substantial financial significance of the proposed points to Morgan Stanley.
5. Morgan Stanley was ordered to pay the costs consequential on the amendments. The claimant was ordered to pay the costs of the permission application. The application costs were summarily assessed by reference to adjusted guideline rates, with reductions for work that was excessive or disproportionate.
6. Permission to appeal was refused. There was no realistic prospect of success in challenging what was a case-management decision or the interpretation of the broadly worded expert-evidence order.

First-instance decision. The judgment records earlier interlocutory proceedings, including an injunction granted in June 2021 and subsequently discharged. Permission to appeal from this decision was refused.