Court of Appeal refuses to delay Liverpool FC trial

The boardroom battle over Liverpool Football Club has attracted criticism from the Court of Appeal after the club’s former owners, Tom Hicks and George Gillett, attempted to delay the start of the High Court trial (see judgment).

The court battle, which is listed in The Lawyer Top Cases 2013, stems from a 2010 dispute about the £300m sale of the club to New England Sports Ventures (NESV). The pair allege that the club was sold at a “substantial undervalue” and said RBS “deliberately” blocked their attempts to refinance.

Mr Justice Smith ruled in October that the case should start in April and ordered the claimants to surrender security for costs. Hick and Gillett appealed this decision.

In this latest bout, 3 Verulam Buildings’ Ali Malek QC was instructed by Clyde & Co partner Paul Friedman for Hicks and Gillett to attempt to delay the start of the trial and vary the security for costs order.

It was argued that the claimants could not raise the funds to pay for the case should the trial begin in April and that the payment for security for costs should not be expedited, therefore delaying the case until late 2013 or early 2014.

In the judgment Lord Justice Lewison stated: “The parties’ positions fluctuated during the course of the [High Court] hearing, not least because Mr Malek dropped the bombshell that neither he nor his instructing solicitor could conduct the trial in June. But it was never suggested to the judge that the indication that he gave in his draft judgment back in August that he wished to see a trial early in 2013 was wrong in principle.”

Monckton Chambers’ Paul Harris QC, appearing for the joined defendant Sir Martin Broughton, argued alongside Erskine Chambers’ Richard Snowden QC, instructed for RBS, that the case should go ahead in April.

Lewison LJ emphasised the ferocity of the fight, in which RBS’s legal costs have already exceeded £1m ahead of the full trial. This comes as the judiciary prepares to fully implement the reforms put forward by Lord Justice Jackson aimed at reducing lengthy court costs.

The judge stated: “The extraordinary volume of paper, the extravagantly long skeleton arguments, which more resemble the Michelin Man than skeletons, and the inordinate citation of authority are quite inappropriate for an application dealing principally with case management decisions.”

According to the CoA ruling, the claimants have now paid £712,000 on account securing the future of the case, half of what they had offered to pay by way of security.

Lewison LJ, who sat alongside Lord Justices Tomlinson and McCombe, refused the appeal allowing the case to go ahead in April.

The dispute raises issues as to the tort of unlawful means conspiracy, breach of fiduciary duty and the duties on directors of group companies with potentially conflicting interests.

The legal line-up

For the claimants Tom Hicks and George Gillett, and their respective companies: 3 Verulam Buildings’ Ali Malek QC and Gregory Mitchell QC, and 4 Stone Buildings’ Richard Hill QC leading 3 Verulam Buildings’ Christopher Harris and Sebastian Isaac of One Essex Court, instructed by Clyde & Co partner Paul Friedman.

For the defendants Broughton, Purslow and Ayre: Monckton Chambers’ Paul Harris QC and Serle Court’s Philip Marshall QC leading Monckton Chambers’ Owain Draper, instructed by Couchmans partner Satish Khandke and Enyo Law partner George Maling.

For the defendant RBS: Erskine Chambers’ Richard Snowden QC leading James Potts of the same set and Fountain Court’s Patrick Goodall, instructed by Freshfields Bruckhaus Deringer partner Patrick Swain.

For the defendant NESV: Erskine Chambers’ David Chivers QC leading Philip Gillyon, instructed by Shearman & Sterling partner Jo Rickard.