CL-2024-000450 - [2025] EWHC 2968 (Comm)

The litigating parties have presented me with a difficult choice. What should the Court do when someone with an apparently strong and substantial, perhaps unanswerable, claim in fraud seeks summary judgment in light of illicit knowledge obtained by unethical means?

This difficult situation is presented by two applications listed to be heard together pursuant to a direction of Robin Knowles J:

The first and fourth to sixth defendants - referred to as “the Astor Defendants” for convenience - made a further application dated 19 September 2025 seeking (a) discharge of worldwide freezing orders (WFOs) as an alternative to striking out or staying the action; and (b) other relief concerning the claimants’ acquisition of such illicit information or their freedom to use any of it. An attempt to have the WFOs discharged for alleged material non-disclosure and unfair presentation failed before Calver J in October 2024. An appeal against that decision was dismissed earlier this year: see [2025] EWCA Civ 1060.

The circumstances giving rise to the present applications, in particular the cross-applications, are unusual. They are also quite concerning.

The Astor Defendants’ litigation solicitor was deceived into meeting a private investigator in the belief that he was pitching for a new client represented by them. He divulged information and offered insights into the perceived strengths and weaknesses of his clients’ position in these proceedings, including aspects of their litigation and settlement strategy. The meetings were secretly filmed and recorded. Those video and audio recordings were provided to the claimants who then applied for summary judgment.

The Astor Defendants contend that such illicit knowledge comprises or includes matters protected by legal professional privilege belonging to them. They say that it was sought and obtained by the claimants so as to gain an unfair advantage; it cannot be forgotten or ignored, and will probably - indeed, inevitably - influence the claimants’ own future conduct of this litigation; and, accordingly, the pursuit of this action (or, alternatively, continuation of the WFOs) is abusive and likely to obstruct a just disposal of these proceedings. This is so irrespective of the strength of the claims against any of them.

The claimants now accept, correctly and candidly, that the methods employed to obtain this illicit knowledge from their adversary’s solicitor were unethical. However, they disavow responsibility for use of such methods; they deny receiving or obtaining insight into any privileged communications, invoking (so far as necessary) the iniquity principle; they say they gained no unfair advantage in the litigation; and irrespective of such illicit knowledge they seek summary judgment. Come what may, they say it would be disproportionate to strike out their claim in circumstances where that would leave the fourth defendant (“Mr Sklarov”) free to enjoy the fruits of his own significant fraud.

These matters were argued over the course of 2.5 days with a day of pre-reading. Three skeleton arguments were filed, totalling over 160 pages and featuring almost 600 footnotes. A total of 122 legal authorities were cited. The hearing bundles contain over 7,500 pages and occupy 25 lever arch files. This includes 14 witness statements (two served during the hearing) and five expert reports, plus numerous references to parts of 16 further affidavits or statements served earlier in these proceedings. These metrics reflect the complexity and gravity of the issues in play. They also demonstrate the difficulty of doing justice to all potential issues in the time available.

I have not found it easy to decide what to do in these circumstances. As indicated during the hearing, it feels appropriate to grant permission to appeal and cross-appeal irrespective of the outcome. The impact of the claimants’ litigation behaviour, which I regard as abnormal and abusive, deserves evaluation by reference to the competing public and private interests at stake. I return to this aspect at the end of my judgment.