The top trials of 2005 and 2006
9 January 2006
Is litigation on the rise? Joanne Harris brings together the most significant cases of 2005 and what promise to be the ones to watch in the year ahead
Top 10 trials of 2005
The past 12 months have been exciting times in the courts, with the headline events of the year being the collapse of both the Equitable Life and BCCI trials after months in court.
However, those trials aside, 2005 confounded the generally held view that fewer cases are reaching court. All but one of The Lawyer’s top 10 cases identified in January 2005 got to court, and judgment was handed down in seven of those.
The picture shows a dramatic shift from 2004, where judgments were handed down in only four of the top 10 cases.
Across the board, the climate was similar. The highest-profile settlement was the courtroom door agreement between Cambridge Antibody Technologies and Abbott Laboratories ahead of the Court of Appeal hearing over rheumatoid arthritis drug Humira.
The House of Lords handed down a series of important judgments, ranging from the June 2005 Spectrum Plus decision to the December ruling over evidence gained by torture.
The forthcoming year will be key to establishing whether or not litigation is again on the increase.
Liquidators of BCCI v Bank of England
Solicitors:Christopher Grierson, Lovells; John Goddard, Freshfields Bruckhaus Deringer
Lead counsel: Gordon Pollock QC, Essex Court Chambers; Nicholas Stadlen QC, Fountain Court Chambers
Outcome: Case dropped
Judge: Mr Justice Tomlinson
Summary of case: Following 256 days in court, Deloitte, the liquidators of the Bank of Credit & Commerce International (BCCI), dropped its £850m misfeasance case against the Bank of England. The result prompted a storm of criticism over the length of the trial, which is estimated to have cost a total of £115m in legal fees.
Equitable Life v Ernst & Young
Solicitors: Julian Copeman, Herbert Smith; Clare Canning, Barlow Lyde & Gilbert
Lead counsel: Iain Milligan QC, 20 Essex Street; Mark Hapgood QC, Brick Court Chambers; Jonathan Gaisman QC, 7 King’s Bench Walk
Judge: Mr Justice Langley
Summary of case: The drama of Equitable Life came to an end in September 2005 when Equitable settled its £2.6bn negligence case with former auditor Ernst & Young. Claims against 15 former directors of the mutual society were settled during the following months.
Taylor Thomson v Christie’s
Solicitors: David Gold, Herbert Smith; Rupert Boswall, Reynolds Porter Chamberlain
Lead counsel: Lord Grabiner QC, One Essex Court; Jonathan Sumption QC, Brick Court Chambers
Judges: Lord Justice May; Lord Justice Jonathan Parker; Lady Justice Smith
Summary of case: Auction house Christie’s won its appeal against the May 2004 judgment of Mr Justice Jack, which awarded damages to art collector Taylor Thomson for misrepresentation and breach of duty of care. Thomson had bought two urns for £2m, described as dating from the reign of Louis XV in France, which were later found to be fake.
HSH Nordbank v Barclays Capital
Solicitors: Lista Cannon, Richards Butler; Andrew Hughes, Linklaters
Lead counsel: Richard Salter QC, 3 Verulam Buildings; Mark Barnes QC, One Essex Court
Summary of case: HSH Nordbank settled its £80m claim against Barclays Capital just a week before the case was due to go to trial in February 2005. The German bank claimed that Barclays Capital had missold collateralised debt obligations. Settlement terms remain confidential.
Kuwait Airways Corporation v Iraqi Airways Company
Solicitors: Chris Gooding, Howard Kennedy; Jack Rabinowicz, Teacher Stern Selby
Lead counsel: Joe Smouha QC, Professor Christopher Greenwood QC, Essex Court Chambers; Robert Hildyard, 4 Stone Buildings; Stephen Nathan QC, Blackstone Chambers
Judge: Mr Justice Steel
Summary of case: The 14-year battle between Kuwait Airways and Iraqi Airways over the loss of the former’s fleet of aircraft during the 1990 Iraq invasion continued in March with the Perjury II trial. Mr Justice Steel ruled in November that Iraqi Airways had deliberately concealed facts and misled the court in previous trials and had obtained a 1995 House of Lords judgment through perjury.
Re Spectrum Plus
Solicitors: John O’Conor, Allen & Overy (for NatWest Bank); Inland Revenue Solicitors Office
Lead counsel: Gabriel Moss QC, 3/4 South Square; Michael Briggs QC, Serle Court Chambers
Summary of case: The House of Lords overturned a 2004 Court of Appeal ruling as well as the 25-year-old decision in Siebe Gorman v Barclays Bank, finding that NatWest’s charge over the book debts of Spectrum Plus was a floating charge. The decision clarified the order in which creditors of insolvent companies are paid.
R v Beckingham and Barrow Borough Council
Solicitors: Treasury Solicitor;Hayton Winkley Kendal; Barrow Borough Council solicitor
Lead counsel: Alistair Webster QC, Lincoln House Chambers; Mark Turner QC, Deans Court Chambers
Judge: Mr Justice Pool
Summary of case: Barrow Borough Council worker Gillian Beckingham was found guilty in April 2005 of a health and safety breach resulting in the deaths of seven people in an outbreak of Legionnaires’ Disease. In December she was given leave to appeal.
Weir & Ors v Secretary of State for Transport/Department of Transport
Solicitors:David Greene, Edwin Coe; Conrad Walker, Clyde & Co
Lead counsel: Keith Rowley QC, 11 Old Square; Jonathan Sumption QC, Brick Court Chambers
Judge: Mr Justice Lindsay
Summary of case: A group of Railtrack shareholders lost their misfeasance case against former Transport Secretary Stephen Byers in October. However, there was some consolation after the shareholders’ lead counsel Keith Rowley QC got Byers to admit that he had lied to a Commons sub-committee over Railtrack’s collapse.
MAN v Freightliner
Solicitors: Clifford Chance; Linklaters (for Part 20 defendant Ernst & Young); Slaughter and May
Lead counsel: Dominic Kendrick QC, 7 King’s Bench Walk; Geoffrey Vos QC, 3 Stone Buildings; Justin Fenwick QC, Four New Square
Judge: Mr Justice Moore-Bick
Summary of case: MAN successfully fought a £400m claim against Freightliner for losses sustained after the purchase of UK truck manufacturer ERF in March 2000. In October Mr Justice Moore-Bick found that Freightliner was liable to MAN and also ruled that auditor Ernst & Young was not liable for ERF’s fraudulent accounting.
BP Amoco v Swiss Re, Axa Global, AIG, Ace, Aegis
Solicitors: Clyde & Co; Herbert Smith; Norton Rose; Simmons & Simmons
Lead counsel: Oliver Popplewell QC, Brick Court Chambers; Dominic Kendrick QC,7 King’s Bench Walk; Mark Howard QC, Brick Court Chambers
Outcome: Judgment pending
Judge: Mr Justice Colman
Summary of case: A battle over liability for all of BP Amoco’s claims from January 1999 to June 2000. The defendants are disputing the validity of insurance contracts made before BP merged with Amoco.
The cases of 2006
The courts are set to be busy this year as litigators prepare to fight a plethora of important and interesting cases.
The year’s biggest case is likely to be the ongoing Cable & Wireless and Pender Insurance v Willis & Ors. Featuring seven firms of solicitors acting for the claimants and a total of 17 defendants, the case began in October 2005 and has several more weeks to run.
This year will be crunch time for a number of firms facing hefty negligence claims. On 16 January, Baker & McKenzie will be in court defending itself against claims brought by Formula 1 team McLaren. The mammoth £150m action against Hammonds, a legacy from merger partner Edge Ellison, hits the courts in February.
Pinsent Masons will also be in court this week as Capital Cranfield Trustees sues the firm over advice given over a pension scheme. Like the Hammonds case, the claim is a legacy from the firm’s predecessor Pinsent Curtis.
Although 2006 features no cases of the size of BCCI or Equitable, the sheer variety and number of hearings means the year is likely to be another vintage one for litigation.
Cable & Wireless and Pender Insurance v Willis & Ors
Solicitors: Francis Kean, Barlow Lyde & Gilbert; Terry O’Neill, Clifford Chance; Dan Sayles, Lovells (for Willis); several other firms for other defendants
Counsel: Jonathan Hirst QC, Brick Court Chambers; Colin Edelman QC, Devereux Chambers
Trial date: Ongoing
Judge: Mrs Justice Gloster
Summary of case:: Cable & Wireless and its captive insurer Pender allege that the defendants were involved in siphoning off a total of £80m in reinsurance premiums from Pender to Guernsey-based protected cell company Messenger Insurance. Collyer-Bristow and partner John Bailey are both named in the lawsuit for allegedly assisting in the fraud, along with Pender’s Isle of Man manager, insurance company Willis.
Matthews & Ors v Kent & Medway Towns Fire Authority
Solicitors: Richard Arthur, Thompsons; Nick Chronias, Beachcroft Wansbroughs
Counsel: Robin Allen QC, Cloisters Chambers; John Bowers QC, Littleton Chambers
Trial date: 11 January 2006
Judge: House of Lords
Summary of case:: A group of part-time firefighters is appealing a July 2004 decision of the Court of Appeal, which found that the part-timers did not have the same rights as full-time firefighters. The case will be crucial in clarifying part-time workers’ rights.
McLaren Racing v Baker & McKenzie
Solicitors: David Lancaster, Pinsent Masons; Michael Robin, David Simon, Robin Simon
Counsel: Ian Mill QC, Blackstone Chambers; Jonathan Seitler QC, Wilberforce Chambers
Trial date: 16 January 2006
Summary of case:: Formula 1 team McLaren is suing Baker & McKenzie, claiming that the firm acted negligently in preparing a commercial agreement with Bernie Ecclestone. A claim against Linklaters brought by Williams Grand Prix settled in December 2005.
Collins Stewart v Financial Times
Solicitors: Rod Christie-Miller, Schillings; Nick Alway, Farrer & Co
Counsel: Richard Spearman QC, 4-5 Gray’s Inn Square; Desmond Browne QC, 5 Raymond Buildings
Trial date: 16 January 2006
Judge: Mr Justice Gray
Summary of case:: Collins Stewart is suing the Financial Times for libel after the newspaper published allegations made by a former employee. The Financial Times is defending the claim, citing statutory and common law privilege.
Football League v Hammonds
Solicitors: Mayer Brown Rowe & Maw; Sarah Clover, Barlow Lyde & Gilbert; Michael Payton, Clyde & Co (for Part 20 defendant Stephen Townley)
Counsel: Justin Fenwick QC, Sue Carr QC, Four New Square; Jonathan Sumption QC, Brick Court Chambers
Trial date: February 2006
Summary of case:: The £150m claim brought by the Football League against Edge Ellison, which merged with Hammonds in August 2000, finally comes to trial. The league claims that Edge Ellison failed to protect its interests during negotiations with OnDigital (now ITV Digital).
AWG v Morrison & Anor
Solicitors: Adam Johnson, Herbert Smith; Andrew Hearn, Dechert (for Sir Fraser Morrison); David Stewart, Olswang (for Stephen McBrierty)
Counsel: Charles Aldous QC, Maitland Chambers; Charles Béar QC, 11 King’s Bench Walk; Lawrence Cohen QC, XXIV Old Buildings; Philip Marshall QC, Serle Court
Trial date: 13 February 2006
Judge: Mr Justice Blackburne
Summary of case:: AWG is claiming up to £130m from Sir Fraser Morrison over the September 2000 acquisition of construction business Morrison Construction, alleging that he and group operations director Stephen McBrierty fraudulently misrepresented Morrison Construction’s financial state prior to its sale.
Apple Corps v Apple Computers
Solicitors: Nick Valner, Eversheds; Ian Terry, Freshfields Bruckhaus Deringer
Counsel: Geoffrey Vos QC, 3 Stone Buildings; Daniel Alexander QC, 8 New Square; Lord Grabiner QC, One Essex Court
Trial date: March 2006
Summary of case:: The Beatles’ record company Apple Corps is suing Apple Computers over its iTunes website. Apple Corps claims that the computer company breached a 1991 agreement over the ‘Apple’ brand by entering into the music business.
National Westminster Bank v Rabobank
Solicitors: Andrew King, Jonathan Kingston, Travers Smith; Bob Goldspink, Morgan Lewis
Counsel: Nicholas Stadlen QC, Fountain Court Chambers; Tony Temple QC, 4 Pump Court
Trial date: October 2006 for three months
Summary of case:: This long-running litigation hits the UK in October following previous cases in the US. NatWest originally sued Rabobank for breaches of covenant. Rabobank New York then counterclaimed for fraudulent misrepresentation and breach of fiduciary duty over a loan made to the Yorkshire Food Group in a claim running into hundreds of millions of dollars.
Office of Fair Trading investigation into credit cards
Solicitors: For MasterCard (three separate appeals) - Greg Olsen, Jones Day; Simon Polito, Susan Bright, Lovells; Nigel Parr, Ashurst. For Visa - Deirdre Trapp, Freshfields Bruckhaus Deringer
Counsel: For MasterCard - Nicholas Green QC, Brick Court Chambers. For Visa - Stephen Morris QC, 20 Essex Street
Trial date: Mid-2006
Summary of case:: The biggest regulatory showdown of the year will take place in the summer before the Competition Appeal Tribunal. In September 2005, the Office of Fair Trading told Visa and MasterCard that the ‘interchange’ fees they charge for processing transactions are too high.
The President of the State of Equatorial Guinea v First System Design Ltd & Ors
Solicitors: Robert Wilson, Penningtons; Andrew Kerman, Kerman & Co (for the first, second and fourth defendants; Joanna Kennedy, Collyer-Bristow (for the fifth defendant)
Counsel: Sir Sydney Kentridge QC, Brick Court Chambers; Philip Shepherd QC, XXIV Old Buildings; Michael McLaren QC, Fountain Court Chambers
Trial date: Pending
Judge: Court of Appeal
Summary of case:: The president and state of Equatorial Guinea is appealing against a September 2005 judgment of Mr Justice Davis in this high-profile case. The claimants say that Simon Mann, Sir Mark Thatcher and others were involved in a coup. Much of the claim has been struck out, prompting the appeal.