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Truth, the whole truth and a little sweetener for telling it: contingent payments to witnesses and other litigation impropriety

A statement of case can be struck out where it is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings (CPR 3.4(2)(b)). The TCC (Mr Justice Fraser) has, in the recent decision EnergySolutions EU Limited v Nuclear Decommissioning Authority, underlined just how bad a party’s behaviour has to be for strike out to be the proper punishment.

The judgment is a long one and concerns the tendering process for a contract to decommission nuclear power stations. So far, so standard. The eye-catching part of the case is that the claimant, unbeknownst to its solicitors, had entered into agreements with its witnesses that provided them with a bonus payment if the litigation was won. Once the solicitors learned of the arrangement (days before the handing down of judgment) they disclosed the arrangement to the court and to the other side. The defendant sought to have the claim dismissed or struck out because of the impropriety of the agreements: the trial, they said, “had been corrupted”.

As almost every lawyer knows (but not the claimant’s in-house counsel who drafted the agreements), an agreement to pay witnesses for their testimony is contrary to public policy and is a breach of the Solicitors’ Code of Conduct. The reason is obvious: witnesses should not be tempted to give untruthful evidence or to colour their evidence in the hope of securing the promised payment.

On the facts, Fraser J found that there was no fraud on the claimant’s part and none of the witnesses in fact gave untrue evidence.

Despite the impropriety of the agreements, Fraser J did not dismiss or strike out the claims. He referred to Alpha Rocks Solicitors v Alade, in which the Court of Appeal held that the power to strike out should only be used in exceptional circumstances where it was just and proportionate to do so, and only where a party was guilty of misconduct so serious that it would be an affront to the court to permit him to continue.

Arrow Nominees Inc v Blackledge was a case in which a party had embarked upon a campaign of forgeries which not only went to the heart of the litigation, but meant that it was not possible to have a fair trial.

Striking a claim out deprives a party of access to the court; they have to have done something so dishonest and discreditable that depriving them of access to justice is the proportionate response. Of course, the courts have other responses to these sorts of arrangement: the weight given to the witness’s evidence will inevitably need to be scrutinised, and a party can be penalised in costs.

Happily, I have very little direct experience of this sort of improper conduct in litigation. Certainly, the same careful approach will be taken by non-CPR jurisdictions, such as Employment Tribunals. A colleague of mine, Lydia Banerjee, has pointed me to one of her cases in which she sought strike out of a claimant’s case because C’s solicitor had, among other acts of “negligence and incompetence” attempted to mislead the Tribunal about steps the claimant had taken.

Although a wasted costs order was made against the solicitor and his former firm, the claim was not struck out. The case was nearing trial and there was no reason to think that a fair trial was not possible. The claimant herself was not guilty of anything.

Practically speaking, I can see that, as the innocent party in a case like these, one might feel aggrieved that a party guilty of serious misconduct is not more seriously and decisively punished for it; I can hear former clients using expressions like “perverting the course of justice”. But the question is really about the integrity of the court or tribunal’s ability to deal justly with the claim, rather than being punitive for its own sake. From the innocent party’s point of view, in any case, my view is that it is always better to have a judgment rather than a strike out, and to have a big fat costs award to sweeten it.

Littleton Chambers Grahame Anderson

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