Litigation cases review – December 2024

Shareholders and privilege

Shareholders have no right to disclosure of the company’s privileged documents. The presumption (known as the Shareholder Rule) that a company cannot assert privilege against its shareholders, except in relation to documents created for litigation against that shareholder, does not in fact exist in English law. If the Rule does exist, it is not an absolute rule but depends on whether there was a genuine joint interest in the circumstances of each individual case. The claimant shareholders in this securities class action had no right to disclosure of the defendant company's privileged documents (Aabar Holdings SARL v Glencore Plc).

Applications for relief from sanctions

The Court of Appeal considered the relevance of the merits of the claim when dealing with an application for relief from sanctions. The general rule is that the merits of the underlying claim are irrelevant. There is an exception to this rule where a party wishes to contend that its case is so strong that it would be able to obtain summary judgment in its favour. In such cases the claimant must give notice that the merits of the claim satisfy the summary judgment test. The claimant had failed to do so here and therefore the defendant had not had a fair opportunity to deploy its case, or to seek to show that the claim was not suitable for summary judgment (Bangs v FM Conway Ltd).

Injunctions

The threshold for granting an interim injunction in defamation claims is exceptionally high. To obtain such an injunction, the claimant must demonstrate that their claim is "bound to succeed". This is a higher test than the American Cyanamid test applying to some other injunctions. The court set aside a without-notice interim injunction in this libel claim on the basis that the claimant had misinformed the interim applications judge by saying that the American Cyanamid test applied (Ferreira-Malosso v Nowakowska).

Access to court documents

The Court of Appeal reviewed the principles regarding public access to court documents. A non-party does not have the right to see every document that is put before the court in every case. They must first explain why granting access will advance the open justice principle. This is a low threshold. The objecting party will then raise any countervailing factors, including any risk of harm or prejudice, and issues of practicability or proportionality. These principles may change if different rules are implemented following the ongoing public consultation about CPR 5.4C (Moss v The Upper Tribunal).

Without prejudice evidence

The court struck out part of a witness statement referring to an offer made at a meeting to negotiate a settlement of the dispute. The negotiations were accepted to be without prejudice, and so in the normal course the parties could not refer to them. The defendants argued that the claimants had made an offer at the meeting that fell within the unambiguous impropriety exception to the without prejudice rule. The court concluded that the claimants’ offer was not abusive and was one they were entitled to make (Bond v Webster). 

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