CL-2020-000117 - [2025] EWHC 1620 (Comm)

This was to have been the trial over a period of 4 weeks of a claim by the claimant for damages in respect of an alleged fraud which is alleged to have resulted in the misappropriation by the defendants of sums in excess of €115m from the pension saving accounts of some 46,222 Swedish pension savers, on whose behalf the claimant seeks to recover the allegedly misappropriated sums.

By the start of the trial however, the claim had been settled or discontinued as against the 4^th, 5^th, 8^th, 11^th and 14^th defendants. On the eve of the trial, the claim was also settled as against the 3^rd defendant, leaving outstanding the claim as against the 2^nd defendant (“Mr Bishop”) and the 1^st, 6^th, 7^th 9^th, 10^th, 12^th and 13^th defendants. On 9 June 2025, the claimant and Mr Bishop asked me to delay the start of the trial to allow them to negotiate and on 11 June 2025, I was asked to approve a consent order resolving the claim as against Mr Bishop. In the result these proceedings have been resolved by agreement against all the actively participating defendants. By the time the hearing resumed on 13^th June, the claim against the 7^th defendant had also been settled. That leaves only the claims against the 1^st, 6^th, 9^th, 10^th, 12^th and 13^th defendants (collectively “remaining defendants”).

Mr Casey KC indicated to me on 11 June 2025 that the claimant wished to receive a reasoned judgment on the merits against each of the remaining defendants. I enquired whether it would not be more convenient to enter judgment in default of either Acknowledgment of Service or Defence as applicable. Mr Casey indicated that his client did not want to adopt that course because it was thought that at least the 1^st defendant (“Mr Serwin”) and the 6^th defendant (“Mr Ökten”) had assets located in jurisdictions other than England and Wales and it was anticipated that enforcing a default judgment in those jurisdictions may prove problematic. Accordingly, Mr Casey invited me to further adjourn the trial until 13 June 2025, to dispense with the attendance of any of the witnesses (since none of the remaining defendants were participating in the trial) and to hear his oral submissions in support of a judgment on the merits against the remaining defendants over one day on 13 June 2025. I accepted Mr Casey’s invitation. My reasons for adopting that course were as follows.

I dispensed with the attendances of the witnesses applying the principles identified by Vos LJ in Clarke v. Lighting & Lamps UK Ltd [2016] EWCA (Civ) 5 at [41]–[42] and applied by Foxton J in Lakatamia Shipping Company Ltd v Tseng & Anor [2023] EWHC 3023 (Comm).

I accepted the submission that the trial should be a trial followed by a reasoned judgment on the merits because I accept that the claimant is entitled as of right to a reasoned judgment on the merits against a defendant who has been served with the proceedings and had notice of, but who had not appeared or been represented at the trial, rather than being required to accept a judgment in default.

To the extent any judicial discretion is involved, I would have exercised it by directing the trial to proceed in the manner contended for by the claimant for the following reasons. Firstly, entering judgment in default of service of either an Acknowledgement of Service or Defence would not result in any material savings of time or costs – the costs have been incurred and even if I had entered judgment, I could have done so only for damages to be assessed, which would have to be proved just as is the case if the trial proceeds as the claimant wished it to. Secondly, I accept the potential difficulty concerning the enforcement of a default judgment outside England and Wales as being an entirely legitimate reason for seeking a reasoned judgment on the merits, applying by analogy the authorities to similar effect concerning applications for permission to apply for summary judgment where no Acknowledgement of Service has been filed by a defendant. Finally, I would have considered the wishes of the claimant to be of themselves a powerful reason for acceding to the request.

In consequence of the directions I have given it follows that the claimant must (a) prove its case (i) to the civil standard (ii) both on liability and quantum (iii) against each of the remaining defendants; and in doing so (b) draw to my attention “points, factual or legal, that might be to the benefit of” the unrepresented defendant, as Foxton J emphasised in Lakatamia Shipping (ibid).