Walker J's 'universal guiding principles'

Walker J's 'universal guiding principles'
In a recent decision of the High Court regarding an application for security for costs pursuant to CPR25.12 (Kazakhstan Kagazy), Walker J identified, front and centre in his judgment, an urgent need for practitioners to bring a 'sense of proportion' to large claims involving without notice freezing orders and heavy interlocutory applications. Walker J summarised the problem as follows:

'This case is an example of something which the court is seeing with increasing frequency. Claims are made for large sums. Emergency orders are obtained, without notice to the other side, which freeze assets worldwide up to the value of the sums claimed. From then on there is a series of interlocutory applications. They are heavier than they should be. Not weeks, but months, are spent assembling material to be put in evidence. Correspondence is exhibited. In some cases it includes something which correspondence should never include, namely the trading of insults between the solicitors for the parties. There has been little, if any, attempt to agree facts or issues. Time estimates for pre-reading are given which underestimate the time needed to read the key evidence and gain a grasp of what the real issues may be. The time needed is far more than it ought to be, largely because no expense has been spared in taking every point.'

The court was clear that such an approach represents bad practice and proposed several (non-exhaustive) 'universal guiding principles' to be observed:

  1. the court expects solicitors and counsel to take appropriate steps to conduct the debate, whether in advocacy or in correspondence, in a way which will lower the temperature rather than raise it
  2. this remains the case even where, indeed particularly where, any concession is perceived as anathema by one or other or both sides. It is perfectly possible to be vigorous without being insulting
  3. imputations on others, whoever they may be, should only be made if they are both necessary and justified. If they are not strictly necessary, or they are not objectively justified, they should be rigorously excluded. Sometimes they are necessary, eg when seeking a freezing order, or when an allegation of bad faith is necessary. They must be confined to what is necessary. As to what is objectively justifiable, regard should be had to the degree of proof that is needed. What is needed in order to support an application for a freezing order may differ from what may be required if an imputation is to be made and sustained in a different context
  4. rather than focus on criticisms of the other side, the focus should be on working out a timetable which will enable opposing parties to consider what facts and issues can be agreed, and what information and revised estimates for reading and hearing time can be given to the court prior to the hearing so as to ensure that the court's time is used efficiently and productively, and
  5. If it is likely that a point which might be taken by a party, or it becomes likely that a point previously taken by a party, will not significantly advance that party's case, or will require a disproportionate amount of time or resources if it is to be resolved, then notification should be given that the point will not be relied upon for present purposes. The notification can be accompanied by an appropriate reservation as to the position in future

In the heat of big litigation, it can be difficult to act according to the guidelines above. Walker J's warning should be heeded by practitioners, particularly as failure to do so may result in costs consequences for the offending parties where, for example, the court decides that such conduct resulted in disproportionate costs being incurred.

For more information on proportionality in light of the Jackson Reforms, LexisPSL Dispute Resolution subscribers can see: Jackson reforms one year on—proportionality. Click here for a free trial.


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About the author:

Barry specialises in international arbitration and commercial litigation. He trained and practised at Jones Day before joining Pinsent Masons. At LexisNexis, Barry is Head of Arbitration and Head of the Lexis®PSL Dispute Resolution Group.

In practice, Barry’s work included commercial, aviation and technology arbitrations pursuant to international arbitral rules, involving UK and international clients. He also has a background in general commercial, civil fraud and IT litigation, including experience before the High Court. While in private practice, Barry worked with a broad range of clients from the private and public sectors.

At LexisNexis, when not focused on the strategic development and operational requirements of the Dispute Resolution Group, Barry’s content work focuses on the law and practice of international commercial arbitration and investment treaty arbitration. In addition to his work for Lexis®PSL, Barry contributes to the LexisNexis Dispute Resolution Blog and New Law Journal on litigation and arbitration matters