Houseman: Behaviour cannot be countenanced by the court
The Court of Appeal is to decide whether a party’s attempt to deceive a solicitor for the other side into disclosing client information is, on its own, an abuse of process.
In the meantime, the High Court has ordered the claimants who hired private investigators to do this have been ordered to pay indemnity costs.
Stephen Houseman KC, sitting as a deputy High Court judge, noted that “nowhere in their 94-page skeleton argument was there an acknowledgement that what took place was unethical or untoward”.
We reported last month on Judge Houseman’s decision to refuse the claimants summary judgment, using the information obtained, finding that their unethical behaviour was an abuse of process.
The solicitor for the defendants in a $415m case was deceived into meeting a private investigator working for the claimants, in the belief he was pitching for a new client.
The unnamed solicitor, who was a newly promoted partner, divulged information and offered insights into the perceived strengths and weaknesses of his clients’ position, including aspects of their litigation and settlement strategy. The meetings were secretly filmed and recorded.
He has been reported to the Solicitors Regulation Authority.
In his latest ruling, Judge Houseman detailed the grounds on which he would grant each side permission to appeal to the Court of Appeal.
For the claimants, it was that his characterisation of their behaviour as an abuse of process was made regardless of what was obtained, its evidential status or ultimate impact on the case.
The judge said he regarded it as “appropriate and indeed necessary to respond to this particular abuse of process, irrespective of whether a further response may be justified after its future impact (if any) has been established”.
Judge Houseman went on: “The claimants’ behaviour is of a kind that cannot be countenanced by the court… It is wrong. Full stop.
“The Court of Appeal may not share my value judgement expressed in this absolute way, however. It may regard it as premature to deal with an abuse of this kind before evaluating its impact on the future of the litigation.
“The claimants’ position is that an unsuccessful attempt to obtain privileged or confidential information from an opposing party’s litigation solicitor is not – without more – an abuse of process. I disagree but more senior judges may disagree with me.”
He allowed the defendants’ appeal against his decision not to strike out the action as a whole at this stage, saying “I can see sense in the Court of Appeal looking at the approach to dealing with an abuse of the kind found in the present case”.
He said in the original ruling that there was a risk he had been too lenient. “The Court of Appeal is better placed to balance the various policies in play. This includes the role and scale of any deterrent factor reflected in the judicial response to an abuse of this kind.”
He ordered the claimants to pay the costs of the hearing on the indemnity basis
This decision did not depend on any independent finding in relation to how the claimants pursued the summary judgment application, but in any case he considered that their “procedural posture in this context is out of the norm”.
The judge explained: “To a large extent this follows from the simple fact that the claimants sought to justify the unjustifiable.
“To make matters worse, they did so in trenchant terms that lacked self-awareness or sensitivity to the gravity of their own misbehaviour. It strikes me as improbable that they would have made the summary judgment application but for their acquisition of the illicit knowledge.
“Nowhere in their 94-page skeleton argument was there an acknowledgement that what took place was unethical or untoward… No apology was offered to the court, and none has been since, for abusing its process in this serious way.”
The judge was critical too of how the claimants treated the allegation of abuse of process as “tangential and subsidiary to the admissibility of the illicit information”.
The “core point”, he said, was that a party that engaged in this kind of abusive conduct “can expect to pay indemnity costs related to any attempt they make to take advantage of such abuse or deny its existence”.
But he included within the scope of permission to appeal any point of principle relating to the award of indemnity costs in this situation.
Judge Houseman added that the parties’ combined costs – £1.8m for the claimants, £2.4m for the defendants – was “nothing short of staggering”.
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