In an era of ever-increasing complexity of commercial cases, in particular involving allegations of cross-border fraud, lengthy trials are on the rise. In recent years, one need only point to Berezovsky v Abramovich (16 weeks) and Libyan Investment Authority v Goldman Sacs International (seven weeks), as examples of the phenomenon for ultra-high value claims occupying the Commercial Court’s docket for weeks at a time.
The trend shows signs of ramping up even further, with Andrew Baker J recently confronting a trial length estimate of 50 weeks. The matter came before him in the first case management conference in the longstanding dispute between The Customs and Tax Administration of Denmark, known as SKAT, and more than 70 companies and individuals accused of participating in a US $1.9 billion tax fraud (Skatteforvaltningen (The Danish Customs and Tax Administration) v Solo Capital Partners LLP (in special administration) and others, CL-2018-000297,000404 and 000590).
Tax refunds
The dispute arises in respect of allegations that the companies and individuals, located around the world, falsely claimed to own stock in Danish registered countries in order to avail themselves of tax refunds to which they were not entitled. A number of tax refund companies are also joined in the action, facing allegations that they were negligent in presenting disingenuous refund applications. In addition to England, multiple cases and investigations have been launched in the United States and across Europe.
The claims give rise to complex cross-border fraud and tax issues. In addition, given the number of defendants, SKAT counsel, Michael Fealy QC, presented to the court that a trial of all issues, including liability and quantum, was likely to take 50 weeks. Thus, the suggestion has been made for a split trial.
The first, significantly shorter, trial would address issues of liability, and the second, quantum. Such bifurcation could reduce, or even avoid altogether, the time required for any subsequent quantum phase, offering the parties and court significant time and costs savings.
In circumstances where the Commercial Court is currently only taking bookings for trials of four weeks or more from January 2021, claimants will readily appreciate the advantages of keeping trial lengths to the bare minimum necessary to deliver justice. For trial lengths of three weeks or less, waiting times are substantially less (currently booking from June 2020).
Indeed, this is at the heart of the Commercial Court’s Shorter trials scheme (STS), a time-sensitive case management process for quicker and less costly access to justice, introduced in September 2015, and tried and tested in National Bank of Abu Dhabi PJSC v BP Oil International Limited. The aim of this scheme is to reach trial within ten months of proceedings having been issued, with judgment to follow within six weeks. The Abu Dhabi v BP case (involving claims exceeding US $70 million) demonstrates that the scheme is not simply for low value cases. Nevertheless, it is fair to say that the suitability of the scheme is mostly aligned to cases involving outcome determinative single issues, and parties need to bear in mind delays arising from appeals (as was ultimately the case in Abu Dhabi v BP).
Every litigator’s arsenal
The most recent Commercial Court statistics, issued in February 2019 and covering the 2017/18 court terms (see The Commercial Court Report 2017-2018), clearly indicate the utility of split trials and the STS in every litigator’s arsenal. Trials of four weeks or less represent the vast majority of the court’s business (95%), with nearly half of those lasting no longer than a single week. Cases of four weeks or more make up the balance (5%).
If longer trials, where appropriate, can be split so that they can move up the court docket, and shorter trials can be expedited, including by application of the scheme, the benefits are obvious. Cases can clear the courts more quickly and efficiently. Not only does this offer parties potential time and costs savings, but it also means faster judgments, which is something every claimant wants and many defendants too.
