Cases in point

The Lawyer’s pick of the leading cases of 2011 was notable for their complexity and armies of legal teams. Such was the size of some of the cases that six are continuing into 2012 as lawyers continue to pursue their adversaries or look to recover costs from the losing side. 

Kazakh conundrum

The largest case in terms of legal advisers in 2011 was JSC BTA Bank v Ablyazov & Ors. It drew in more than 50 lawyers, including 22 partners, and 32 barristers and eight silks.

The £1.5bn ongoing dispute focuses on allegations of fraud by the former chair of Kazakhstan-headquartered JSC BTA Bank (BTA), Mukhtar Ablyazov. At the start of the year Ablyazov was represented by a team of five Stephenson Harwood partners including Roland Foord, Alan Bercow, Louis Flannery, Stuart Firth and Richard Gwynne. The case is believed to have earned the firm upwards of £20m, yet the client was restless.

In September, ahead of some feisty preliminary court hearings, Ablyazov dramatically switched from Stephenson Harwood to Addleshaw Goddard, instructing head of litigation Richard Leedham to assemble a team. The High Court was informed of the switch in September and, since then, Addleshaws has appeared

in court on Ablyazov’s behalf.

In December BTA, which is being represented by a Hogan Lovells team, asked the High Court to jail Ablyazov, who was granted asylum in the UK in July, for being in contempt of court. The claimants argue that he embezzled more than $5bn (£3bn) and has complicated proceedings by failing to disclose ownership of more than 600 shell companies.

Earlier in the year (30 June) the ­tycoon’s brother-in-law Syrym Shalabayev was jailed in his absence for 18 months for assisting Ablyazov in ­hiding his vast assets in defiance of High Court orders. With Shalabayev’s whereabouts still unknown, in ­September Mr Justice Henderson ­ordered his lawyers at Clyde & Co, led by partner Julian Connerty, to disclose his contact details (The Lawyer, 12 September 2011).

The parties continued to fight over the disclosure documentation and whether or not it was subject to legal professional privilege during a case in October. Clydes claimed privilege could be applied to 221 documents – known as the ‘221 schedule’.

Henderson J’s judgment, which came in November, made it clear he did not approve of the shift in Clydes’ approach. He remarked that the 221 schedule process was a “process which, in my judgment, reflects little credit on Clyde & Co, and it is hard to avoid the conclusion that an insufficiently rigorous and professional ­approach was adopted to at least the initial phases of the review”.

The complexity of the BTA case could mean that the main tranches of proceedings, of which there are five strands, are not heard by Mr Justice Teare and Mr Justice Clarke until 2013. This is no doubt good news for Addleshaws’ revenue targets. The firm is also representing Russian ­oligarch Boris Berezovsky in his plethora of litigation in the High Court, a leading case of 2010.

At the same time Leedham is awaiting judgment in Standard Life v ACE European Group, in which he ­instructed Brick Court Chambers’ George Leggatt QC to lead Simon Salzedo for Standard Life. In that case Standard Life was seeking to recover £100m from its insurers over monies lost through the Standard Life Pension Sterling Fund as a result of the Lehman Brothers crash.

Reach for the Sky

Judgment is also awaited in the pay TV trial that pitched British Sky Broadcasting (BSkyB) against the ­Office of Communications (Ofcom). The complexity of the case saw BSkyB team up with unlikely ally Virgin Media to fight an Ofcom decision to force the regulated wholesale supply of SkySports1 and SkySports2 to other pay TV retailers on terms set by the watchdog.

Spellbound

A number of trials are expected to rumble on into 2012 and it will be ­particularly interesting to see the evolution of the battle embroiling Bloomsbury and JK Rowling.

The author and publisher were caught up in a plagiarism case pursued by Paul Allen, trustee of the ­estate of the late Adrian Jacobs. He first alleged in 2010 that themes from Jacobs’ 1987 book The Adventures of Willy the Wizard were copied in Harry Potter and the Goblet of Fire, which was published in 2000, and that Rowling therefore had infringed copyright.

Delivering the first ruling on the matter in October 2010 Mr Justice Kitchin said the claim could proceed although success was “improbable”. By April 2011, Kitchin J had clearly had enough and ordered the claimants to put up £1.6m as security for costs or face having the claim thrown out of court. According to Reynolds Porter Chamberlain (RPC) partner David Hooper, who was ­instructed for the defendants, this was a novel approach by the court.

“The regime for getting security for costs is limited,” he says. “It’s usually reserved for when a party is bankrupt or based outside the EU. Having it here was quite useful.”

In fact, it rendered the claim invalid and left the defendants pondering how such an allegedly vexatious claim could take up High Court time.

That is the question RPC (instructed for Bloomsbury) and Schillings partner Gideon Benaim (for JK Rowling) will be attempting to get answered this year, when the ­defendants plan to go for indemnified costs.

It is understood that Allen, who was represented by DMH Stallard, had the backing of third-party funders who had attempted to bankroll a similar case against JK Rowling through the New York courts, only for the case to be thrown out.

“It seems to be a pretty foolish way of proceeding,” another source says. “They tried being a nuisance litigant, launching as many cases as they could to see whether they’d be paid off. It would be mad to pay people off like this – the claim was ridiculous.”

Instead, the defendants are ­attempting to force the claimant to reveal who had funded its case so it can proceed with the costs hearing.

Pills and bellyaches

Funding also became an issue in the Seroxat Group Litigation Order (GLO). More than 500 claimants joined the GLO against pharmaceutical giant GlaxoSmithKline UK, alleging to have suffered withdrawal ­effects when reducing, discontinuing or attempting to discontinue use of the antidepressant Seroxat. It was ­alleged that such suffering amounted to personal injury.

According to a lawyer close to the case the claimant numbers have fallen dramatically as a result of the withdrawal of legal aid. This was made particularly contentious ­because the firm used to represent the claimants, Cardiff-headquartered Hugh James, revised down the considered success of the case, forming the basis for the withdrawal of state funding.

It is understood that 125 claimants will continue to pursue the action but that they will be looking for a new law firm to represent them. Meanwhile, a group of the remaining claimants are appealing the Legal Services ­Commission’s decision to cancel the legal aid.

Awaiting disclosure

There have also been delays in the case hearings for Société Générale v Württembergische Versicherung AG & Ors due to wranglings over disclosure and evidence; and Imperial Tobacco’s judicial review bid against the Secretary of State for Health and the Attorney General has been delayed owing to the fact the legislation has been altered by the Government.

A source says: “Because the Government has decided to amend the regulations that are part of the regime that’s subject to judicial ­review the hearing date has been ­adjourned and now the case is fixed for February. This is still an important case involving complex EU and ECHR [European Convention on Human Rights] arguments.”

Such is the importance of the case that it has involved lawyers from Hogan Lovells, with partner Paul Dacam acting for British American Tobacco; Ashurst partner Ed Sparrow for Imperial Tobacco; Clifford Chance partner Luke Tolaini for Philip Morris and Freshfields Bruckhaus Deringer partners William Robinson and Tom Snelling for ­Gallaher Ltd.

Burning success

A separate case brought by Imperial Tobacco and several tobacco retailers against the Office of Fair Trading (OFT) challenging price-fixing fines was a resounding success for the claimants in 2011. This case, which was heard by the Competition Appeal Tribunal, was expected to run for up 12 weeks but was cut down early as the OFT’s case collapsed.

According to several sources, the due diligence on its single witness in the matter, Ms Bayley, was lacking and its case management haphazard. Burges Salmon head of competition Laura Claydon, who represented The Co-operative Group, adds: “There needs to be much tougher scrutiny internally, and at an early stage, of the evidence the OFT seeks to rely on during its administrative phase, ­especially witness evidence.”

Defences down

The collapse of the defence was also the fate of (1) British Arab Commercial Bank; (2) Arab Banking Corporation; (3) ABC Islamic Bank; (4) ­Calyon; (5) HSBC v Ahmad Hamad Algosaibi Brothers (AHAB) & Ors. These five actions were part of the worldwide litigation surrounding the alleged colossal fraud perpetrated by Maan Al Sanea, the Saudi Arabian billionaire owner of the Saad Group, against the AHAB partnership.

In June it was announced that AHAB would not defend the $250m claim after deciding that the judge would likely find that the company had not done enough to prevent the forgery and fraud it alleges lay behind the loans.

“It could be found in this case that if the Algosaibis knew there was [improper use of loans] they should have taken more aggressive steps to detect and prevent the massive forged lending scheme,” said Baach Robinson & Lewis partner Eric Lewis, who was coordinating the defence, at the time.

Win some, lose some

The outcomes of our 2011 cases constitute a mixed bag. There were only six judgments, while a further four matters settled on the court steps.

The size and complexity of the AHAB case forced it to withdraw its defence, and when it came under ­judicial scrutiny the OFT’s justifications for fining tobacco companies just did not stack up.

Many of the matters will rumble on through 2012 as lawyers attempt to track down costs or seek to take cases to the next level. It all bodes well for the Ministry of Justice’s plan to ­ensure London remains the world’s leading litigation centre, with dispute resolution lawyers reaping the ­benefits.

Judgment delivered

l           (1) Morrisons; (2) Imperial Tobacco; (3) Cooperative Group;

(4) Safeway; (5) Asda; (6) Shell v Office of Fair Trading

In favour of claimant

l           Alstom Transport v Eurostar International & Siemens

Claim dismissed

l           R (on the application of British Bankers Association) v Financial Services Authority & Financial Ombudsman Service

Judicial review rejected

l           ‘Building Schools for the Future’ (five separate claims to be consolidated and listed together)

Part-win

l           Trebor Bassett Holdings & The Cadbury UK Partnership v ADT Fire and Security plc

Part-win

l           The Royal Bank of Scotland v Hicks & Gillett & Ors

In favour of claimant

Ongoing

l           Paul Gregory Allen v (1) Bloomsbury Publishing plc & (2) Joanne Kathleen Murray (aka

JK Rowling)

l           Imperial Tobacco, British American Tobacco, Philip Morris Ltd & Gallaher Ltd v Secretary of State for Health & The Attorney General

l           Sandra Bailey & Ors v GlaxoSmithKline UK

l           Société Générale v Württembergische Versicherung AG & Ors

l           Innovator One plc; Tech Investors v Roper

l           JSC BTA Bank v Ablyazov & Ors

Settled

l           (1) STV Central Ltd (2) STV North Ltd v (1) v ITV Network

l           Centrica (British Gas) v Accenture

l           British Airways v Unite The Union

l           (1) Crédit Agricole Corporate and Investment Bank v IKB Deutsche Industriebank AG; (2) Calyon v IKB Deutsche Industriebank AG; (3) Financial Guaranty Insurance Company & FGIC UK Ltd v IKB Deutsche Industriebank AG

Defence withdrawn

l           (1) British Arab Commercial Bank; (2) Arab Banking Corporation; (3) ABC Islamic Bank; (4) Calyon; (5) HSBC v Ahmad Hamad Algosaibi Brothers (AHAB) & Ors

Awaiting judgment

l           (1) British Sky Broadcasting & Ors v Ofcom & Ors

l           Standard Life v ACE European Group