Vincent Tchenguiz has been ordered to go back to the drawing board in his £2bn claim against Grant Thornton and other parties he alleges conspired to induce the Serious Fraud Office to investigate him.
Leggatt J today struck out his over-long particulars of claim in the action and gave his lawyers 21 days to serve replacement particulars half the length.
The judge said that the claim, issued by Tchenguiz and related parties, was “not in essence a complicated one”.
He added: “The case pleaded in the particulars of claim is that the defendants conspired to induce the Serious Fraud Office (the SFO) to investigate the claimants on a false basis by the unlawful means of making statements to the SFO which the defendants did not believe to be true. It is alleged that the defendants acted in this way with the aim of securing certain commercial advantages.”
But he said that, in elaborating this case, the 94-page particulars of claim went too far, with “some 50 pages of narrative, liberally interspersed with assertions of fraud, falsity, dishonesty and improper motive”, and were issued without first requesting permission from the court to exceed 25 pages.
He said: “This form of pleading is typical of complaints in United States litigation where pleadings serve different purposes and different practices obtain. It has no place in English civil procedure.”
Setting out the correct approach, he said: “Statements of case must be concise. They must plead only material facts, meaning those necessary for the purpose of formulating a cause of action or defence, and not background facts or evidence.
“Still less should they contain arguments, reasons or rhetoric. These basic rules were developed long ago and have stood the test of time because they serve the vital purpose of identifying the matters which each party will need to prove by evidence at trial.
“As commercial transactions have become more complex and more heavily documented (including electronically), adhering to the basic rules of pleading has become both increasingly difficult and all the more important. It is increasingly difficult because it is harder for pleaders to distil what is essential from the material with which they are provided and because they can feel pressure to show their mettle and enthusiasm for their client’s case by treating the pleadings as an opening salvo of submissions in the litigation.
“It is all the more important because prolixity adds substantial unnecessary costs to litigation at a time when it is harder than ever to keep such costs under control.”
But he added: “The particulars of claim which have been served in the present case flout all these principles. They are 94 pages in length. They include background facts, evidence and polemic in a way which makes it hard to identify the material facts and complicates, instead of simplifying, the issues.
“The phrasing is often not just contentious but tendentious. For example, the defined term used to refer to three of the defendants is ‘the Conspirators’. Nor can headings such as ‘the plot’ and ‘the plot evolves’ be supposed to be ‘in a form that will enable them to be adopted without issue by the other party’.”
He struck out the particulars of claim, ordered fresh particulars of no more than 45 pages to be served within 21 days, and left the Tchenguiz parties to foot the bill for drafting the disallowed particulars.
In a warning to other litigants in the Commercial Court, he said that he had shown his judgment to the judge in charge of the list, who he said “endorses the principle that flagrant disregard of the guidance applicable to statements of case may lead to adverse costs orders”.
The claim was issued last November against Grant Thornton UK LLP, and its partners Stephen John Akers and Hossein Hamedani; Kaupthing Bank HF and Icelandic lawyer Johannes Runar Johannsson, who was a member of Kaupthing’s Resolution Committee and is currently a member of its Winding Up Committee.
The defendants are preparing their defences to the action, while Leggatt J said that Kaupthing and Johannsson have an application pending to challenge the court’s jurisdiction to hear the case.
Tchenguiz and ors v Grant Thornton UK LLP and ors Commercial (Leggatt J) 20 February 2015
Romie Tager QC, Jonathan Crystal, Zacharias Miah and Harris Bor (instructed by McGuireWoods London LLP) for the claimants
