High Court emphasises importance of explaining clearly English rules of procedure and burden of proof

In Paralel Routs Limited v Fedotov, HHJ Paul Matthews, who was sitting as a judge of the High Court, highlighted the importance and necessity of procedural rules being explained properly. This case involved a defendant, a Russian national, who at the time of trial was in prison in Moscow and did not give live evidence, and another Russian national claiming to have an interest in the claimant’s claim.

The judge made interesting, and for the benefit of the parties, detailed observations and comments about disclosure, redaction, civil evidence and how the courts manage cases generally. But it was the judge’s references to basic legal principles that were most notable, particularly the principle that as a claimant is the one asserting a claim, it must therefore prove its case.

Case background

The claimant, a company incorporated in the British Virgin Islands but administered in Cyprus, was suing the defendant, a Russian citizen, for debts alleged to be due under no fewer than 17 loan contracts. The claimant claimed in the alternative for damages for breach of those contracts. In the claim form, the total sum claimed was £26,354,176.72, but that amount included accrued interest calculated at £3,309,612.36 and then, on top of that, “late payment fees” of £14,614,816.85. Only when skeleton arguments were being exchanged did the claimant seemingly drop the claim for “late payment fees”. Even so, the substantive, effective claim, including interest, was still a high value sum of almost £12 million.

The judge pointed out that the trial had been complicated by regular changes made by the claimant to its case, even though it was relatively simple and pleaded accordingly. The claimant asserted that the parties entered into written agreements of loan on certain dates, for definite amounts and with exacting dates for repayment with interest.

The claimant also pleaded that these written agreements were varied by a deed of variation. There were further provisions about interest and late payment fees. The claimant pleaded that it advanced the various loan amounts to the defendant by certain dates but that the defendant had defaulted on those repayments and that he remained in default notwithstanding the claimant’s demands. Only when the defendant requested further information about the claimant’s claim did the claimant make clear that its case was based on the signed loan agreements and not upon the basis of any parallel oral agreements. Just the same, the claimant argued different points to that which were ultimately pleaded.

The defendant’s defence was quite simple in that he denied the whole claim against him and argued that the alleged loan agreements had been fraudulently created, or that his signature had been obtained by deception.

Importance of procedure as explained by the judge

In his judgment, HHJ Matthews was very keen to highlight that it may well be the general perception that the English CPR are very time-consuming and expensive to manage, and that, as a result, they do not necessarily result in justice. However, this was a case which clearly demonstrated the necessity and importance of procedural rules so that a fair trial was assured and seen to be taking place, and the optimum way to achieve a fair and equitable outcome between the parties, particularly in a high value case such as this.

HHJ Matthews explained the importance in particular of advance disclosure and production of documents in unredacted form, control by the court of expert evidence, and (at trial) cross-examination of witnesses. The judge pointed out that it was the persistence of the defendant’s legal team in enforcing these procedures that made a significant difference to the overall adjudication of the case. The judge went on to highlight the pivotal role played by unredacted documents, as opposed to their redacted versions, and the cross-examination of witnesses, particularly the claimant’s. To that end, the judge commended cross-examination by counsel of the witnesses, which was based on the lawyers’ careful analysis and understanding of the documents.

The judgment

The judge went on to say that the necessity of following procedure was also vital because it emphasised the important point that it is, of course, for the claimant who is asserting its case to prove its case. It is not for the defendant to prove anything.

The judge finished by making clear that he was not required in this case to decide in terms whether the defendant was telling the truth, although he suggested that that could be an issue. He reminded that it was a judge’s role to decide whether the claimant has proved its case. In this case, the judge determined that the claimant had failed to prove its case on its own merits; therefore, it actually made no difference whether any more evidence in support of the defendant’s case had been adduced.

The judge was keen to stress that he did not judge the Russian witnesses in the same way as English ones, referencing body language and how they comported themselves in court, and acknowledging that business practices in Russia and the UK were very likely to differ.

The practical implications for practitioners are therefore quite clear: always remind claimant clients that he or she who asserts must prove. Remember also that the court expects the parties to follow the very clear rules required of them.

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