In a recent, hard fought Commercial Court litigation, after weeks in trial, hearing 30 days of factual witness evidence and six days of expert witness evidence, Mr Justice Waksman found that a senior executive of the Defendant was had made “false” representations, “knowing that they were false”; he was said to be “prepared to be dishonest”.

Waksman J noted that “[i]n reaching these conclusions I have, of course, borne in mind that it is a serious thing to allege and establish dishonesty” but concluded that the party “did make fraudulent misrepresentations”. In finding this, Waksman J noted that he had “take[n] into account that there were aspects of [the senior executive’s] evidence which were clearly unsatisfactory and implausible.” In a line quoted in numerous press articles, Waksman J noted that that he had found the Defendant “to be guilty of serious deceit”.

On the other hand, the principal of the Claimant was found to be “a tough, clever and creative entrepreneur” whose evidence was “for the most part… reliable”, with the judge concluding that he accepted that “the essential truth of what she was saying had happened”.

The judgment has attracted significant media attention, partly due to the huge sums claimed (figures which fluctuated over the course of the case from a high of £1.6 billion to a low of around £300 million) and partly because of the high profile nature of the parties – one of the United Kingdom’s major high street and investment banks and companies controlled by a well-known financier linked with takeovers of Premier League football clubs amongst other ventures. Press coverage of the decision has been intense, interest magnified still further by the pointed nature of comments by Waksman J in his judgment.

Notwithstanding his findings regarding dishonesty and deceit, Waksman J found for the Defendant in relation to issues of causation and noted in his executive summary of his judgment that his findings “meant that [the Claimants’] claim as a whole must fail.” No damages were payable to the claimants. A press release about the judgment noted that the Claimants “had failed to establish that [they] had suffered any loss as a result of the events complained about”, an analysis put forward under the headline noting that the claimant had been “successful in long-running billion-pound claim” brought against them.

The judgment, as many readers will have identified, is the recent legal High Court decision in the litigation between Barclays Bank plc (“Barclays”) on the one hand and PCP Capital Partners LLP and PCP Finance International Limited (“PCP”) on the other.[1]

Barclays was, of course, the “successful” defendant, PCP the unsuccessful claimant failing to prove it had suffered any loss. The senior executive on the receiving end of Waksman J’s forceful judicial admonishment was Roger Jenkins of Barclays, the party found by Waksman J to be guilty of “serious deceit” when set against the “tough, clever and creative” Amanda Staveley of PCP, whose evidence was “for the most part… reliable”.

Unsurprisingly, much press comment has been devoted to the contrasting judicial commentary in relation to Mr Jenkins and Ms Staveley, whilst the expression “serious deceit” has found its way into more than a few newspaper headlines. Although this does not detract from the simple point that Barclays’ legal arguments were successful and PCP (and the third party funder involved in the matter) will likely have expended significant sums in legal costs (in the order of multiple millions of pounds), it is clear from the judgment and the press coverage that it is not as simple as Barclays “winning” – one national newspaper going so far as to describe it as “wounded” by the judgment. The judgment comes on top, of course, of a number of revelations prior to and during the trial last year, many relating to ill-judged comments from Barclays executives about Ms Staveley.

It is never possible to look behind decisions made by those running a case, and the dizzying sums involved mean that Barclays may well consider that the bad press involved in this litigation is the lesser of two evils compared to being required to pay hundreds of millions of pounds to PCP. However, all parties to disputes can draw a lesson from this litigation.

When contemplating launching a claim, or determining whether to defend one which is threatened, parties need to consider more than just the merits of their legal position. It is commonplace to consider the financial expense of litigation, and the management time that it takes. The old truism that arbitration is quicker and cheaper than litigation also no longer holds water – whilst arbitrations have their advantages (and disadvantages) speed and cost are not amongst them. But beyond these matters, litigation does not take place in a vacuum. Once private documents and discussions will become public (one advantage of arbitration, of course, is its confidentiality) and media scrutiny can be applied, the interest of regulators may be piqued and clients and customers may be perturbed by what they see and hear.

None of these issues are insurmountable, and parties need to be prepared to protect their legal position where necessary – settling a dispute, after all, can carry its own reputational issues, notwithstanding agreed public statements about there being no blame to cast around. What is crucial is that parties seek legal advice as soon as the possibility of a dispute arises. Not only can these legal advisers advise on the law, but they should also engage with the client’s public relations team, and potentially external experts, to manage any wider reputational issues that may be involved. Equally, claimants should be aware of any extra leverage that they may have over their defendant in any settlement negotiations, and their lawyers should ensure to factor in these “externalities” to advice that is given as to how to proceed.

It is essential that potential litigants look at the big picture, and see the dispute in a wider business context, in order to ensure that the right decisions are made. This of course involves considering the merits of the legal position, but it also involves far more than that. Sometimes all arguments will align in favour of one course of action, other times different matters may pull in different directions, and the best that can be hoped for is a victory that involves collateral damage. In all circumstances, parties must go into litigation with their eyes open, and ensure that they attempt to address all of the risks involved so far as they are able to.

Richard Coopey is a Partner at Grosvenor Law and specialises in substantial, high value commercial disputes.

The contents of our blog posts do not constitute legal advice and are provided for general information purposes only.

[1] [2021] EWHC 307 (Comm)