Property holding company left reeling after High Court decision

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An application for specific disclosure of previous allegations of mis-selling at Barlcays has been dismissed by the High Court as a “fishing expedition.”

Background

Claverton Holdings alleges that two staff members of Barclays Bank gave negligent advice which resulted in mis-selling in relation to an interest rate swap purchase.  A five-day trial is listed for June 2016 and the parties have exchanged standard disclosure.  However, Claverton applied to Court for an Order requiring Barclays to disclose details of previous complaints against two employees.

Claverton relied on a number of Court of Appeal Judgments, arguing that the case law in O’Brien v Chief Constable of South Wales Police [2005] 2 AC 534 and R v Z [2002] 2 AC 485 supported a contention that similar facts are admissible to prove a Defendant’s guilt, in particular where a number of similar incidents or accounts from a variety of witnesses knit together to produce overwhelming evidence of a Defendant’s guilt.

The Court applied the two-limbed test from O’Brien to determine whether to order disclosure:

  • The first question to consider is whether the information sought is probative of the matters at issue, that is whether they will work to prove the claim.  If so it is classed as ‘admissible’.
  • The second question is whether, taking into account case-management considerations, such evidence should be admitted.

Judgment

Claverton’s barrister conceded that allegations or complaints about mis-selling by the individuals at the Defendant “was not itself probative that there had been mis-selling in this case.”  The Court found that “the only potential relevance was if other cases contained allegations that similar oral representations or statements were made by the relevant persons, supporting the likelihood that they had been made in this case.”

Claverton was seeking to rely on the allegations alone – and not witness statements to support them.  The Court found that this presented Claverton with a further problem, namely that it would not be adducing evidence of similar facts, but “merely evidence that similar allegations had been made.”  This evidence would therefore be hearsay and of little value in proving the claim – thereby failing stage one of the test.

The Court also rejected Calverton’s attempt to rely on rulings of the Financial Ombudsman Service.  Such rulings are not a finding of legal liability and Barclays would likely seek to adduce its own evidence to address any findings which would be likely to create a raft of issues affecting the trial timetable – something Courts are eager to avoid.

Mr Justice Phillips commented: “The application has, at this point, in my judgment, become a fishing expedition, hoping to find an admission by Barclays or a finding of similar facts where there is no reason to believe that such exists.”  He went on to say that to order the requested disclosure would “involve the bank in an extensive and expensive search and analysis of a large number of cases to determine what specific allegations were made and to what extent those allegations were “similar” to the allegations in this case…”

Comment

More generally, the case is an indication to Claimants that they will not be assisted by the Court where they have commenced an action without sufficient evidence.  Parties who believe they have a claim should take expert advice on their prospects, and also on the evidence that they will need to gather to support their claim.

Equally, those faced with applications and requests for further information should consult a lawyer to avoid making any unnecessary concessions or making disclosures where it is not proper to do so.

The case is a strong reminder that proportionality remains a prominent aspect of civil litigation, especially in terms of parties’ disclosure obligations, and that litigation ought to be conducted in a cost-efficient manner.

Contact us

If you would like to speak to a specialist solicitor to determine if your claim has merits, get in touch with Tom Smith, Head of Dispute Resolution at tom.smith@forbessolicitors.co.uk or call 0800 689 0831.

Tom Smith

About Tom Smith

Tom is a Partner and Head of the Dispute Resolution Department at Forbes Solicitors. Tom’s blogs cover his specialisms of business disputes involving commercial contracts, shareholders, partnerships, share sales and warranties, banking issues, restrictive covenants and professional negligence.
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