Judge clamps down on ‘cunningly crafted’ witness statements

Mr Justice Cooke reflects on trend for lawyer manipulation of statements

£60m – it will buy you 133 million bags of crisps, 18 Lamborghini Veneno Roadsters (the most expensive car in the world) or one legal battle against Deutsche Bank.

Norwegian billionaire and owner of Sebastian Holdings Andrew Vik may be wishing he’d spent his money on crisps instead of fighting in court for $8bn (£5bn) over loss-making trades after being ordered to pay £51m in indemnity costs. And that’s on top of a $240m compensation package.

Within a fortnight, £32m must be paid into the court.

This was one of the largest cases ever heard by the Commercial Court, running for more than four months and resulting in an 800-page judgment from Mr Justice Cooke. Like many of his peers Cooke J took a tough line on costs while issuing stinging criticism of Vik as the chief witness for Sebastian.

Vik was “not a reliable witness”, the judge said, adding that his evidence was “incapable of acceptance on the crucial issues”.

“I have concluded that in some respects he was simply dishonest,” the judge continued.

David Foxton
David Foxton QC

It could have been worse for Sebastian, had the judge awarded total costs to Deutsche Bank as requested by the bank’s counsel, David Foxton QC of Essex Court. There was a discount because the judge found some of the bank’s witnesses too were “dishonest and hid the true position”.

The judge talked about costs and went a step further to reflect on the use of witness statements in long trials. There is concern, he said, that statements are being “cunningly crafted” to put
across a case by reference.

“I wonder whether we’d not be better off going back to witness ‘evidence in chief’ and summaries […] with a pagination limit so no one is taken by surprise,” he said.

The Commercial Court is grappling with costs issues as the wider judiciary decides whether to lift the budgeting limit on cases valued above £2m. It is taking a hard line on parties that raise legal bills unnecessarily as it seeks to maintain competitiveness in the international market. 

Maybe Cooke J has come up with another method of costs control.