CL-2015-000047 - [2025] EWHC 2724 (Comm)

LEGAL PRINCIPLES

The principles applicable on an application for permission to amend were conveniently summarised by Nicklin J in Amersi v Leslie [2023] EWHC 1368 (KB) at [140]-[142]:-

Further, the Court must strike a balance between the interests of the applicant and those of other parties and litigants more generally, applying the overriding objective: Invest Bank PSC v El-Husseini [2024] EWHC 1235 (Comm) at [29].

As noted at § 15 of the 18 July judgment the Claimants’ strike-out application is made under CPR rule 3.4(2)(a) and/or (b), pursuant to which the court can strike out part of a statement of case if it discloses no reasonable grounds for the bringing or defending the claim, is an abuse of the court’s process, or is otherwise likely to obstruct the just disposal of the proceedings. As indicated in notes 3.4.1 and 3.4.2 to the White Book (2025 edition):-

“Grounds (a) and (b) cover statements of case which are unreasonably vague, incoherent, vexatious, scurrilous or obviously ill-founded and other cases which do not amount to a legally recognisable claim or defence.”

Statements of case which are suitable for striking out on ground (a) include those which raise an unwinnable case where continuance of the proceedings is without any possible benefit to the respondent and would waste resources on both sides (Harris v Bolt Burdon [2000] C.P. Rep. 70; [2000] C.P.L.R. 9). For the purposes of a r.3.4(2)(a) application, the applicant was usually bound to accept the accuracy of the facts pleaded unless they were contradictory or obviously wrong, MF Tel Sarl v Visa Europe Ltd [2023] EWHC 1336 (Ch) (Master Marsh) (in contrast to the position under CPR r.24.2 where the court is considering the claim or an issue in it and may be required, without conducting a mini-trial, to examine the evidence that is relied upon to prove the claim and consider the evidence that can reasonably be expected to be available at trial, see para.24.2.3).

It has been stated that the court should not grant an application for strike-out under CPR r. 3.4(2)(a) unless the court is certain that the claim is bound to fail: Richards (t/a Colin Richards & Co) v Hughes [2004] EWCA Civ 266, [2004] PNLR 35 at [22] per Peter Gibson LJ, followed by Joanna Smith J in Ashraf v Dominic Lester Solicitors [2023] EWHC 2800 Ch at [76].

Note 3.4.2 to the White Book also states that:-

“it is not appropriate to strike out a claim in an area of developing jurisprudence, since, in such areas, decisions as to novel points of law should be based on actual findings of fact (Farah v British Airways, The Times, 26 January 2000, CA referring to Barrett v Enfield BC [2001] 2 A.C. 550; [1989] 3 W.L.R. 79, HL).”

CPR r.3.1(2)(g) provides that the Court may “stay the whole or part of any proceedings or judgment either generally or until a specified date or event”. The test is “what is required by the interests of justice in the particular case”: Athena Capital Fund v Holy See [2022] 1 WLR 4570 at [48]. But “the usual function of a court is to decide cases and not to decline to do so”, and the Court “will therefore need a powerful reason to depart from its usual course”: Athena Capital at [51].

The general power under CPR r.3.1(2)(p) cannot be used to circumvent specific rules of procedure which capture the settled practice of the Court: New Lottery Co Ltd v Gambling Commission [2025] EWHC 1522 (TCC) at [21]-[26], [30], [38], [41].

A useful starting point is Lord Diplock’s dictum in F Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295, 361:-

“The court has no power to compel an applicant for an interim injunction to furnish an undertaking as to damages. … It retains a discretion not to enforce the undertaking if it considers that the conduct of the defendant in relation to the obtaining or continuing of the injunction or the enforcement of the undertaking makes it inequitable to do so, but if the undertaking is enforced the measure of the damages payable under it is not discretionary. It is assessed on an inquiry into damages at which principles to be applied are fixed and clear. The assessment is made upon the same basis as that upon which damages for breach of contract would be assessed if the undertaking had been a contract between the plaintiff and the defendant that the plaintiff would not prevent the defendant from doing that which he was restrained from doing by the terms of the injunction: see Smith v. Day (1882) 21 Ch.D. 421, per Brett L.J., at p. 427.” (emphasis added)

Generally, at least, a distinction is drawn between losses caused by the injunction and losses caused by the underlying proceedings. This point was considered in some detail by the High Court of Australia in Air Express. Barwick CJ stated:-

“4.

If I were free to do so, I might be inclined to think that there is reason to support the view taken by Jessel M.R. in Smith v. Day (1882) 21 Ch D 421. It seems to me that there is much to be said for taking the view that the opinion of the Master of the Rolls better reflected the responsibility of the court in granting an injunction than the later view expressed in the cases to which my brother refers. After all, the damages recoverable by the successful litigant should be referable to the action of the party who seeks the injunctive order rather than to the action of the court in deciding to grant it. Approach to the court through the application for an injunction should not either be discouraged nor visited with a penalty. The presence of the undertaking does not in any respect lighten the responsibility of the court in making its decision to grant the injunction. The action of the court, if it had the facts and circumstances fairly and properly placed before it, might well be thought not to provide a reason for awarding damages. (at p310)

5.

But it is far too late to re-open the decision reached in the judgment in Griffith v. Blake and the subsequent cases. I treat the relevant law as finally settled in the sense expressed by my brother Aickin. But the adoption of that view makes it the more imperative to maintain the distinction between results which are caused by the grant of an injunction and those which flow from the fact of the litigation itself.”

The Claimants note that Barwick CJ evidently did not contemplate that the actions of the applicant for the injunction, for example impropriety on its part, could affect the approach to compensation on an Inquiry. However, the court was not concerned with, and did not hear argument on, that point (still less the specific issue raised on the present application). Barwick CJ was, moreover, concerned with the question of whether an inquiry should be ordered at all, rather than the assessment of loss on an inquiry.

Gibbs J stated:

“3.

In a number of authorities the court has distinguished between loss which was caused by the injunction and loss which arose from the litigation: see Bingley v. Marshall (1863) 9LTNS 144, at p 145; Gault v. Murray (1892) 21 OR 458, at p 462; Douglass v. Bullen (1913) 12DLR 652, at p 655 and Newman Bros. Ltd. v. Allum, S.O.S. Motors Ltd. (In liq.) (No. 2) (1935) NZLR Suppl 17, at p 18. There is no reason to doubt that it is correct in principle to draw such a distinction if the facts warrant it. If the pendency of the litigation, rather than the making of the order, was the cause of the plaintiff's loss, the terms of the undertaking have no application, since the plaintiff has not sustained loss by reason of the order. Moreover, except in certain cases analogous to malicious prosecution, a defendant is not entitled to recover damages for loss resulting from legal proceedings brought against him - the only liability of the unsuccessful plaintiff is to pay costs. The court should no doubt scrutinize with care an assertion by a plaintiff that loss which has been suffered by a defendant has resulted from the litigation rather than from the making of the interlocutory order, since a plaintiff should not be allowed to evade payment of the price which he has agreed to pay for the grant of the injunction. In the end however the question becomes one of fact: did the making of the order cause the loss? The onus of proof must, in accordance with general principles, lie on the defendant who asserts that he sustained damage by reason of the order.

4.

It was submitted on behalf of the appellant that it is enough that the making of the order should have been a cause of the damage, so that if both the making of the order and the continuance of the litigation are concurrent causes the undertaking will be applicable. However, in almost every case in which an injunction is granted the injunction will play some part in causing the party bound by it to act in accordance with its terms. To order a plaintiff to pay damages where it appears that the party bound by the injunction would have acted as he did even if the injunction had not been granted, would be to give the undertaking an effect obviously not intended. The party seeking to enforce the undertaking must show that the making of the order was a cause without which the damage would not have been suffered.”

Mason J stated:-

“12.

The distinction between damage caused by the injunction and damage which flows from the litigation is, I think, well founded on the language in which the usual undertaking as to damages is expressed. The party seeking damages must show that he has sustained damage "by reason of the Order". The words connote a causal connexion between the damage and the interim injunction.

13.

English law has not adopted a uniform approach to causation. Instead, it has tended to take refuge in the notion that causation is very largely a question of fact. But the many statements to this effect which are to be found in the decided cases do not attempt to deny the fact that the common law has applied a variety of theories and standards of causation, in each instance applying that which is in point of policy the most apt or appropriate to the question which arises for decision.

14.

For this reason little is to be gained in the present case from an examination of the myriad authorities which deal with causation of damage in contract, tort and other situations many of which were pressed upon us in argument. We are better advised to look to the purpose which the undertaking as to damages is designed to serve and to identify that causal connexion or standard of causal connexion which is most appropriate to that purpose. The object of the undertaking is to protect a party, normally the defendant, in respect of such damage as he may sustain by reason of the grant of the interim injunction in the event that it emerges that the plaintiff is not entitled to relief. It is no part of the purpose of the undertaking to protect the defendant against loss or damage which he would have sustained otherwise, as for example, detriment which flows from the commencement of the litigation itself. That is loss or damage which the defendant must bear himself, as he does when no interim injunction is sought or granted. Consequently, it is for the party seeking to enforce the undertaking to show that the damage he has sustained would not have been sustained but for the injunction.”

As indicated in Gibbs J’s judgment, part of the rationale for the rule may be that redress may be available, separately, for loss caused by the pursuit of the proceedings themselves, if the ingredients of the tort of malicious prosecution can be made out.

The Air Express approach has been followed in England, as noted by Beatson LJ in SCF Tankers Ltd (formerly Fiona Trust) v Privalov [2017] EWCA Civ 1877, [2018] 1 WLR 5623:-

“41.

If the court decides to enforce a cross-undertaking, the decision of the High Court of Australia in Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 has been influential in relation to the approach to causation and the burden of proof. Mason J stated at p 325 that it is “for the party seeking to enforce the undertaking to show that the damage he has sustained would not have been sustained but for the injunction”. Although Mason J dissented as to the result, on burden of proof there was no division of view: see Gibbs and Stephen JJ at pp 313 and 320. The approach in the Ansett case has been followed by a number of decisions in this jurisdiction. They include the decision of this court in Energy Venture Partners Ltd v Malabu Oil and Gas Ltd [2015] 1 WLR 2309, a case concerned with whether a cross-undertaking as to damages should be fortified. Referring to the judgment of Gibbs J, in the Ansett case as to what was required to enforce the undertaking itself, Tomlinson LJ stated, at para 54, that “As to causation, it is sufficient for the court to be satisfied that the making of the order or injunction was a cause without which the relevant loss would not have been suffered”.

42.

The person who seeks to do so must show that the loss would not have been suffered “but for” the order; that is, on the facts of this case, that the freezing order and the security undertakings were an effective cause of the Standard Maritime parties’ loss. See also Tharros Shipping Co Ltd v Bias Shipping Ltd (The Griparion) (No 1) [1994] 1 Lloyd's Rep 577, 582 (Waller J), Harley Street Capital Ltd v Tchigirinski [2005] EWHC 2471 (Ch) at [20]–[21], (Mr Michael Briggs QC), Hamblen J at first instance in Energy Venture Partners Ltd v Malibu Oil and Gas Ltd [2012] EWHC 79 (Comm) at [19] and the discussion in Gee, Commercial Injunctions, 6th ed (2016), p 365, para 11.044.

…

45.

I have also concluded that the judge did not err in stating that causation was established. … He stated, at para 48 (see para 26 above), that the order must be an effective cause of the loss. If anything, that was a stricter test than the “but for”, sine qua non test laid down in the authorities to which I have referred. He was entitled to approach and deal with the question of causation in a common-sense way.”

In Al Rawas v Pegasus Energy Ltd [2008] EWHC 617 (QB); [2009] 1 All ER 346, Jack J held that the court is always constrained by the terms of the cross-undertaking, which (on the standard wording) means that damages can only be awarded on a compensatory basis. This meant that exemplary damages were not available even by reason of dishonesty in obtaining the order (see [51]-[54]). In Berkeley Administration Inc v McClelland [1995] ILPr 201, it was alleged in an inquiry under a cross-undertaking (in relation to various injunctions) that the orders had been obtained on the basis of “spurious allegations” and “in the course of a concerted and deliberate campaign by the plaintiffs to prevent or inhibit competition by the defendants” (see [21]). In the Court of Appeal, the view was expressed by Stuart-Smith LJ, at [44], that while it was not necessary in that appeal to decide whether a claim for aggravated or exemplary damages could be brought at all in an inquiry, he was “bound to say that in my opinion Maccorp face formidable difficulties in law in so asserting. It seems to me at the very least that Maccorp have to establish the ingredients of the tort of the abuse of process, which is a separate tort in English law. There must be malice and absence of reasonable and probable cause in bringing the proceedings”.

In Abbey Forwarding v Hone [2014] EWCA Civ 711, [2015] Ch 309, McCombe LJ confirmed the nature of the court’s task in an inquiry:

“In the result, therefore, and perhaps not surprisingly, I reach the conclusion that the law as to the recoverability of loss suffered by reason of a cross-undertaking is as stated by Lord Diplock in his dictum in the Hoffmann-La Roche case, but with this caveat. Logical and sensible adjustments may well be required, simply because the court is not awarding damages for breach of contract. It is compensating for loss for which the defendant should be compensated (to apply the words of the undertaking). Labels such as common law damages and equitable compensation are not, to my mind, useful. The court is compensating for loss caused by the injunction which was wrongly granted. It will usually do so applying the useful rules as to remoteness derived from the law of contract, but because there is in truth no contract there has to be room for exceptions.”

By ‘logical and sensible adjustments’, the court may have had in mind its conclusion that, if appropriate, general damages could be awarded in an inquiry for upset, stress, loss of reputation and other effects caused by the ‘aggravating’ ways in which the claimant had policed the injunction. In that context, the court indicated that the contractual measure (under which such general damages are generally not recoverable) was not to be applied “automatically”, and that it was right as a matter of principle to enable compensation under a cross-undertaking for such losses (see in particular [104]-[106] and [110]). Commentary indicates, however, that the damage must still have been caused by the injunction itself, as opposed to the stigma of the underlying claim in fraud: Civil Fraud (1^st ed.) at [31-038(13)].

Males J in Fiona Trust v Privalov [2016] EWHC 2163 stated that the test is whether the freezing order was an effective cause of the loss in question ([48]). In an earlier decision in the present case, Peter MacDonald Eggers KC (sitting as a Deputy High Court Judge) said: “That is not to say that the injunction must be the sole cause of the loss; the injunction can operate as a concurrent cause of the loss along with the proceedings. If the proceedings and the injunction combine cumulatively to give rise to the loss, in the sense that the loss would not have been caused at all or to the same extent by the proceedings themselves, the respondent will have demonstrated to the requisite standard that the loss would be caused by the injunction.” (Alta Trading UK Ltd (formerly Arcadia Petroleum Ltd) v Bosworth [2021] EWHC 1126 (Comm), [2021] 4 WLR 72 at [42(5)]).

In Dr Reddy's Laboratories (UK) Ltd v Warner-Lambert Co LLC [2021] EWHC 2182 (Ch), [2021] Bus LR 1496, Zacaroli J considered the position where injunctions were held to have been wrongly granted in favour of a patent proprietor against multiple pharmaceutical companies. Each inquiry into damages involved considering the market share the relevant respondent to the injunction would have had but for the injunction wrongly granted against it. However, the judge held, in order fairly to assess that market share it was also necessary to remove the effect of the other wrongly granted injunctions: thus, there should be a single counterfactual across all inquiry claims, in which counterfactual none of the injunctions had been granted.

During the course of his judgment, Zacaroli J noted that a preliminary issue was whether the counterfactual should be that (1) the order was refused by the court, (2) the order was applied for but not pursued before the court and (3) the order was not sought in the first place ([87]). It was argued that, on the various alternatives though to different degrees, all of these would have resulted in knowledge that the patent was invalid. That would particularly be the case on alternative (1), especially if the counterfactual involved the court having refused the injunction because it found no arguable case that the patent was valid. Zacaroli J at [89]-[91] found persuasive the decision of Jagot J in Sigma Pharmaceuticals Pty Ltd v Wyeth [2018] FCA 1556 (Federal Court of Australia) rejecting that approach on the basis that it would effectively remove from the analysis the risk arising not from the injunction but from the existence of the patent and the underlying proceedings. Zacaroli J also found persuasive Jadot J’s decision, in the context of a delay between the injunction being applied for and granted, that the appropriate assumption was that the injunction application was not pursued on the date the order was actually made ([92]-[93]). That was because making the counterfactual depart from the actual at the latest possible moment was the best way of isolating the effects of the order itself as opposed to other matters (ibid.).

Goff & Jones, “The Law of Restitution” (10^th ed.) § 26-4 states:-

“… Litigants are not responsible for the courts’ mistakes unless they have intentionally misled them or have otherwise abused the court process.

As Wilde CJ observed:

“The law allows every person to employ its process for the purpose of trying his rights, without subjecting him to any liability, unless he acts maliciously and without probable cause.”

Unless they have deliberately abused the court process, successful litigants therefore commit no tort when they win a court order that is later held to have been mistaken. This is why a claimant seeking an interim injunction must give a cross-undertaking as to damages as a precondition for the making of the order: otherwise the defendant would be left without a remedy if he suffered loss through compliance with the order and the issue between the parties was then resolved in the defendant’s favour.” (footnotes omitted)

In Coudert Brothers, IML had successfully tendered to invest in a Russian suit manufacturer being offered for sale under the government’s privatisation programme. When it came to executing the sale, IML were advised by Coudert. However, IML’s tender was subsequently held by the Moscow Arbitration Court to be invalid on the basis that it was an offer to invest in the manufacturer for 5 years, whereas the government had only approved a 3 year investment. Secondarily, the Court held that it was invalid because IML had failed to obtain approval for it from the Federal Anti-monopoly Committee. Appeals against this decision failed and IML lost its investment.

IML sued Coudert in negligence for not discovering and properly advising in relation to the 3 year-5 year point, which they argued would have led to the sale agreement being amended to provide for a 3 year investment, and its investment thereby being maintained (see [10]). As explained at [12], Coudert’s defence included the argument that anti-monopoly permission would still have been necessary and that on that independent ground the transaction would still have been declared invalid. Coudert asserted that this broke the chain of causation. IML's response was to assert that if permission was needed, “the fault was Coudert's, and that Coudert could not rely on it as breaking the chain of causation”.

At trial, the judge found Coudert liable in damages to be assessed on the basis of IML’s lost chance of maintaining its investment (see [17]). In doing so, he held that Coudert could not rely on its own further negligence (in failing to advise on the anti-monopoly point) to break the chain of causation or diminish the chance (see [16]). Coudert appealed on various bases, including maintaining its reliance on the anti-monopoly point.

In the Court of Appeal, Waller LJ observed that the anti-monopoly point only arose because the limitation period had expired for a further negligence claim against Coudert in this regard. In any event, he held (at 42]) that the ability to bring such a claim would have no effect on IML’s damages, since “[t]he case would still remain that Coudert failed to provide the chance by amending the agreements, and that chance is still the same chance that they would have failed to provide by not obtaining anti-monopoly permission”. Hence, Coudert was concerned with two wrongs which would each, independently, have led to the same loss being suffered (i.e., in that case, the same chance of IML retaining its investment).

Against this background, Waller LJ stated as follows (having considered the case of Bolitho v City and Hackney Health Authority [1998] AC 232, in which Lord Browne-Wilkinson held that a doctor could not escape liability for negligence by saying that the same damage would have occurred in any event, because they would have committed some other breach of duty thereafter):-

“44.

The question is whether, if IML can establish that Coudert should have provided them with the chance by reference to the 3 to 5 year point, Coudert can say in relation to the assessment of that chance, that it should be reduced by virtue of an “intervening” act of negligence by Coudert, because the “intervening act” gives rise to a separate cause of action in respect of which the limitation period has expired.

…

“46.

In the loss of a chance case, such as the one we are dealing with, the failure to produce the agreements relating to the 3-5 year point has caused a loss of a chance. IML does not need to rely, and indeed does not seek to rely, on the failure to obtain permission, to establish the chain of causation of that loss of a chance. It is Coudert who want to reduce the value of the chance, by asserting they failed to do something which would have lowered the chance. Is there a principle which disallows a defendant from relying on a wrong which he has committed in order to reduce the damages that would otherwise flow from a tort or breach of contract? It seems to me that there should be such a principle, and that is what Lord Brown Wilkinson was recognising. It is quite difficult to say why it should be so, other than that it flows from public policy where it is a principle that a person should not be entitled to rely on their own wrong in order to secure a benefit. It is furthermore not unfair to apply such a principle. Damages would flow from the original act of negligence; why should Coudert be allowed to rely on a further act of negligence to reduce that damage?

Laws LJ stated:-

“[64] First, although I entertained considerable doubts about the matter while the case was being argued, I have reached the clear conclusion that in principle a defendant should not be allowed to rely on a wrong perpetrated by himself in order (in whole or part) to break the chain of causation put forward by the claimant to establish and quantify the damage sustained by him by reason of the defendant's breach of contract or tort. This may be seen (as Waller LJ expresses it: paragraph 46) as an application of the general rule of the common law that a party may not rely on his own wrong to secure a benefit, and I agree that some support is to be found for that approach in the speech of Lord Browne-Wilkinson in Bolitho. But I think it is also consonant with modern ideas of causation now being developed in the cases. Authority supports the proposition that the resolution of causation issues, certainly in the law of tort, is by no means merely a fact-finding exercise; in many instances it is an evaluative judgment, concerned to establish the extent to which a defendant should justly be held responsible for what has befallen the claimant. This seems to me to be vouchsafed in particular by the opinions of Lord Bingham and Lord Hoffmann in Fairchild [2002] 3 WLR 89 at paragraphs 10–12 and 52–54 respectively; to which may be compared, in the context of damages for loss of a chance, the observations of Kirby J in the High Court of Australia in Chappel v Hart [1999] Lloyd's Law Reports: Med 223 at 245, 246, cited by Latham LJ in this court in Gregg v Scott [2002] EWCA Civ 1471’.

Carnwath LJ stated that, like Laws LJ, he preferred to dispose of the anti-monopoly point by reference to principles of causation.

In Beart v Her Majesty’s Prison Service [2005] EWCA Civ 467; [2005] ICR 1206, the Court of Appeal upheld a decision of the Employment Appeal Tribunal (which followed Coudert) that an employer could not rely on a subsequent unfair dismissal to break the chain of causation regarding its liability for earlier disability discrimination. The employer had sought to argue that the cause of the claimant’s lost earnings was her dismissal (not the earlier discrimination), meaning that the damages awarded should be limited to the statutory maximum for unfair dismissal claims. The Appeal Tribunal rejected this argument. Among other things, it held that the result sought by the employer should not be permitted because it would “severely damage the protection given to employees by the Disability Discrimination Act 1995…” (see [25]). In the Court of Appeal, Rix LJ stated at [30]:-

“… the argument that the Prison Service's own act of unfair dismissal can be said to break the chain of causation is very puzzling to me. This is the language of new intervening act, but I do not understand how it is said that the unfair dismissal is an “intervening” act, when it is the act of the tortfeasor itself. Nothing in the submissions began to explain this to me: indeed, we were not shown any authority or learning on the concept of new intervening act. McGregor on Damages, 17th ed, 2003, speaks in this context of the intervening acts of a third party (at paras 6–031ff) and of the claimant (at paras 6–057ff) but not of the tortfeasor. Nor do I understand why the mere act of dismissal, even if it were justified which of course it was not, could do more to wash away the long-lasting effects of the prior discriminatory act than merely to prevent the damages for loss of earnings being measured by a comparison with earnings under the old employment.”

Rix LJ held that he would reject the employer’s argument “even in the absence of the Coudert case” because “[a]ll that has happened is that the employer has committed two discrete wrongs in respect of which statute has provided a cap in respect of one but not the other” (see [34]). In any event, the defendant had accepted that they were bound by Coudert unless they could distinguish it, and Rix LJ held that they could not (see [35]-[39]). At [39], Rix LJ referred to Coudert Bros. as reflecting “a statement of broad principle, derived, as Waller LJ said, from public policy and a concept of fairness, or, as Laws LJ said, to be seen as an application of a general rule of the common law”.

In D Morgan Plc v Mace & Jones (A Firm) [2010] EWHC 3375, Coulson J held at [395]: “if the intervening act was that of the defendant then, as a matter of public policy and common sense, the defendant could not rely on its own intervening negligence to break the chain of causation: see Normans Bay Ltd v Coudert Brothers [2004] EWCA Civ 215.”

Enron Coal Services Ltd v English Welsh & Scottish Railway Ltd [2009] CAT 36 was a competition law claim in which the claimant sought damages for the lost chance to supply an electricity generator with coal as a result of certain infringements of competition law by the defendant (EWS). The Competition Appeal Tribunal held (without hearing any argument on the point) that Coudert was authority for the proposition that “the “but for” world should be purged not only of EWS’s abuse and its consequences, but also any other unlawful conduct on EWS’s part” (see [90]). It clarified that what this meant was that it would “assume, for the purposes of the but for world, that EWS would not have engaged in any other illegal behaviour, including any other violation of competition law” (ibid.).

In Duke of Sussex v MGN Ltd [2023] EWHC 3217 (Ch), the defendant sought to distinguish between losses caused by its unlawful obtaining of the claimant’s private information, versus its subsequent publication of that information. Both constituted deliberate wrongful acts, but (like in Coudert) a claim in relation to the second was statute barred (see [1551]). Fancourt J said:-

“1548 While it is clearly right to seek to deal with each individual cause of action separately, that does not mean that it must be assumed, as a starting point, that loss that was caused by one tort cannot have been caused by a different tort. It is perfectly possible in the law of tort for there to be two or more causes of the same loss. For each individual occasion of UIG, the relevant question is: what losses claimed were sufficiently caused by that occasion of UIG. The starting point is not (which was the effect of MGN's argument) to exclude certain losses if they would have been recoverable as damages for a different wrong.

1549 The underlying UIG wrong is a factual cause of the distress caused to each claimant by the later misuse of their private information. Without the UIG there could have been no publication. Further, in all cases, it is not disputed that the private information unlawfully obtained was obtained by MGN for the purpose of publishing it in its newspapers, if it was of interest. It was certainly perfectly foreseeable that MGN would publish the information that it wrongly obtained; indeed, MGN intended to do so and had control over that matter. It is not suggested by MGN that in any particular case there was such a hiatus between the two wrongs that there was no connection between acquisition of the private information and its publication. The original wrong was therefore an effective cause of the distress that each claimant suffered from publication, even if the unlawful publication was a more immediate cause.

1550.

A second act of wrongdoing by MGN itself, namely publishing the private information, cannot be relied upon by MGN as breaking the chain of causation. That issue arose in a case called Normans Bay Ltd v Coudert Brothers [2004] EWCA Civ 215. The defendant solicitors tried to argue that a second negligent act by them (a claim in respect of which was statute-barred) broke the chain of causation between the first negligent act and the loss that the claimant suffered. The argument was rejected by the Court of Appeal on public policy grounds: a defendant cannot be allowed to rely on their own wrongdoing to secure a benefit in that way…. If that was the right answer in respect of a supervening negligent act, it is even more clearly right in relation to a supervening deliberately wrongful act such as publishing private information that was unlawfully obtained.”

1551 If the claim for the wrong of publication were not statute-barred and both claims were advanced, a claimant would not be able to recover damages twice for the same losses. However, that merely raises the issue of double-counting that Mann J was alert to in dealing with the different causes of action in the Gulati judgment, and does not preclude a conclusion that the UIG caused losses that flowed from subsequent publication.

1552.

The answer to the question of causation cannot therefore be that loss flowing from publication cannot have been caused by the UIG because it were caused by the publication. The relevant questions are whether, first, the post-publication losses claimed, whatever they are, were factually caused by the UIG at all: and, second, whether in law they should be treated as not so caused (i.e. as a matter of public policy).”

1553.

…It is difficult to see why, otherwise, the law should treat distress resulting from publication of private information that was effectively stolen in order to publish it as not having been caused in law by the theft. The information was stolen for the purpose of putting it into the public domain, not for private enjoyment. The fact that there is, in principle, a separate cause of action for the later wrong that also caused the distress made no difference in the Coudert Brothers case.”

The Court of Appeal in King Crude Carriers applied the principle in Mackay v Dick & Stevenson (1881) 6 App Cas 251 to the effect that a party cannot rely on its own breach to claim that a condition precedent has not been met. Popplewell LJ (with whom the other members of the court agreed) observed that the “concept that a person should not be permitted to take advantage of their own wrong” was “a statement of policy” and “not a freestanding principle of universal application” ( [79]). Accordingly, he sought to identify a “juridical” or “legal basis” for applying this principle, put another way “a legal doctrine whose ingredients must be fulfilled and are then applied” (see [79]-[80]). In that case, the justification identified was that it represented the presumed contractual intention of the parties, which was an approach that had long been applied in contract cases (subject to a sufficiently clearly expressed contrary intention) (see [81]-[84]).

Clerk & Lindsell on Torts (24th ed.) states at ¶2-137 that “a defendant cannot rely on his own subsequent negligence so as to break the causal connection between his original act of negligence and the claimant’s loss.”, citing (inter alia)Coudert Brothers. The editors also refer to the comment of Lord Browne-Wilkinson in Bolitho v City and Hackney [1998] A.C. 232 at 240 that: “A defendant cannot escape liability by saying that the damage would have occurred in any event because he would have committed some other breach of duty thereafter.”

McGregor on Damages (22nd ed.) says at ¶9-005:-

“The “but for” test thus requires the court to consider whether the wrongdoer’s act or omission was necessary for the loss that was suffered. The basic question is whether the loss would still have been suffered if the wrongful act had not occurred. That test “directs us to change one thing at a time and see if the outcome changes”, with the only things to be changed to be the removal of the wrongful act and any other unlawfulness of the defendant or third parties that would otherwise occur. The removal of unlawful acts by the defendant or third parties is designed to ensure that a victim is not made worse off by further wrongdoing. Thus the court often asks whether the loss would have been lawfully suffered.”

In a very recent judgment, JSC Commercial Bank PrivatBank v Kolomoisky & Ors [2025] EWHC 1987 (Ch), Trower J stated at [1152]:-

“… as Bryan J explained in Lakatamia [Lakatamia Shipping Limited v Su & Ors [2021] EWHC 1907 (Comm).] at [938], where there are successive torts:

'So far as causation is concerned, as a general principle of tort law, it is no answer for the defendant to say that, but for his wrongdoing which has in fact resulted in loss, the same loss would have been suffered because of some other tort or legal wrong was or would have been committed at a later point in time whether by the defendant or someone else. The principle in [sic] summarised in McGregor on Damages, 21st ed., at paragraph 8-007 as follows:

“the “but for” test is usually applied by asking whether but for the wrongdoing the loss would have been lawfully suffered. This qualification ensures that a victim is not made worse off by further wrongdoing” (original emphasis)”’

It has been held that if a transaction induced by fraud causes loss, then it is to be treated as the only cause. In Barings Plc v Coopers & Lybrand [2002] EWHC 461 (Ch), Evans-Lombe J said at [723]:-

“In [Standard Chartered Bank v Pakistan National Shipping Corp (No.4) [2001] Q.B.167], the Court of Appeal decided that the maker of a fraudulent statement is liable for all losses caused to a representee who is induced by it to enter into a transaction. This is so even if the representee was negligent in doing so. As long as the deceit was a cause of the claimant’s loss, it is to be treated as the only cause. The decision of the Court of Appeal has since been reversed in part by the House of Lords ([2002] 3 W.L.R. 1547), but without affecting that element of the judgment.”