£700m civil lawsuit postponed until conclusion of parallel criminal proceedings

In these Commercial Court proceedings in PCP Capital Partners LLP and others v Barclays Bank Plc, PCP claims a large sum in damages from Barclays Bank PLC (the bank) in connection with PCP’s alleged role in the bank’s 2008 capital raisings. The trial of this matter was scheduled to commence on 15 January 2018 and was listed for eight weeks.

There are parallel criminal proceedings brought by the Serious Fraud Office which also arise out of the 2008 capital raisings. The bank is not a defendant in those proceedings, but Barclays PLC (the bank’s parent company) and four former senior Barclays employees are. The criminal trial is due to start on 9 January 2019 with an estimated length of 12 to 16 weeks.

Where civil proceedings and criminal proceedings arising from the same facts proceed in parallel, there is a danger that one set of proceedings might affect the fair conduct of the other. Accordingly, the courts have long had a discretion to stay civil proceedings until related criminal proceedings have been determined, provided justice requires it: see, for example, Jefferson Limited v Bhetcha.

In the present case, allowing the civil trial (in January 2018) to precede the criminal trial (in January 2019) would have caused a real risk of serious prejudice to the bank in the conduct of its defence against PCP’s claim and to the defendants in the criminal trial in the conduct of their defence. The bank therefore applied to the Commercial Court to delay the start of the trial of PCP’s claim until after the conclusion of the criminal trial. In this application, the bank was supported by the Serious Fraud Office, and by Mr Varley, a former chief executive of the bank and a defendant in the criminal proceedings.

After a two day hearing (some of which took place in private) Knowles J CBE held that the start of the civil trial should be delayed until after the conclusion of the criminal trial in May 2019. In so holding, he accepted the bank’s submission that there was a significant overlap between the civil and the criminal proceedings, and that to allow the civil trial to precede the criminal trial would lead to a real risk of prejudice in relation to the latter. He also took account of the fact that, if the civil trial were to precede the criminal trial, it could do so only subject to certain restrictive “safeguards”, and that such safeguards would “have their own price,” for example in relation to witness handling and the contribution witnesses might be able to make at both the civil and the criminal trial.

Knowles J CBE noted that delay to the civil trial was not lightly to be contemplated. He had regard, in particular, to the possibility that any delay might affect the availability or quality of witness evidence. Whilst he ultimately held that these matters could not outweigh the real risk of prejudice in relation to the criminal trial, he allowed for the possibility that some steps in the civil trial might be taken as planned in January 2018, before the conclusion of the criminal trial, such as the taking of evidence from certain witnesses.

Applications for a stay of civil proceedings in view of parallel criminal proceedings rarely succeed: see, for example, Bittar v Financial Conduct Authority. That said, the learned judge’s decision adds to a line of authority which, as the bank had submitted, suggests that, whilst civil proceedings are rarely stayed from the outset or at any early stage, the trial of the civil matter should not come on before the trial of the criminal matter: see, for example, Guinness Plc v Saunders (unreported, 17 October 1988); Re DPR Futures; Polly Peck International plc v Nadir; Secretary of State for Health v Norton Healthcare Ltd.

Laurence Rabinowitz QC, Alex Polley and Max Schlote at One Essex Court, and Richard Lissack QC at Fountain Court acted for Barclays. They were instructed by a team at Simmons & Simmons LLP led by Colin Passmore and Adam Brown.

Simmons & Simmons Colin Passmore Adam Brown

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