Section 1 CA-2025-000525 - [2025] EWCA Civ 1307

1.

This appeal concerns applications made by the claimant (“ENRC”) in November 2024 to amend its claims for loss during the quantum phase (“Phase 2”) of two long-running sets of Commercial Court proceedings. The first set was commenced in 2017 against Dechert LLP and Neil Gerrard, a partner in that firm of solicitors (together “the Dechert defendants”). The second was commenced in 2019 against the Serious Fraud Office (“the SFO”). Those proceedings were, and continue to be, managed and tried together by Waksman J (“the Judge”).

2.

Following an 11 week trial, mainly concerned with liability issues (“Phase 1”), on 13 May 2022 the Judge had found that:

i)

between 2011 and 2013 the Dechert defendants, while retained as ENRC’s solicitors and acting through Mr Gerrard, had breached their duties to ENRC by disclosing confidential and privileged information to the SFO without ENRC’s consent; and

ii)

the SFO was in serious breach of its own duties and had induced breaches of contract by the Dechert defendants by engaging with and taking information from Mr Gerrard when it knew or was reckless as to the fact that he was acting without authority and against his client’s interests.

3.

On 21 December 2023, following a further trial of certain issues of causation and loss (“Phase 1A”), the Judge had found that the SFO’s wrongdoing was an effective cause of losses claimed by ENRC in respect of unnecessary fees, unnecessary costs and wasted management time. The Judge further found that, but for its wrongdoing, the SFO would not have commenced a criminal investigation into ENRC in April 2013 (“the CI”), an investigation which lasted until August 2023 but resulted in no charges being brought.

4.

The losses claimed by ENRC by reason of the CI were to be assessed at the Phase 2 trial, preliminary directions for which were given by the Judge in March 2024. Pursuant to those directions, on 30 August 2024 ENRC served Further Information in which it first identified the relevant changes to its case as to loss, leading to the applications to amend. The first Case Management Conference in Phase 2 took place on 15 January 2025, at which the applications to amend were considered. The CMC resumed on 14 February 2025 after the Judge had delivered judgment on the amendment applications, in the light of which he made orders for disclosure.

5.

The disputed aspects of the applications to amend followed ENRC’s belated realisation that certain losses it had claimed from the outset of the proceedings, mainly comprising a significant proportion of the increased borrowing costs alleged to have resulted from the opening of the CI, had not been incurred by ENRC itself but by one or more of its subsidiary companies. ENRC sought permission to amend to claim that ENRC had suffered loss by reason of alleged diminution in the value of its shareholdings in the subsidiaries, such loss matching the proportion of the relevant subsidiary’s loss equivalent to ENRC’s percentage shareholding. ENRC made it plain that it would rely solely on this “dollar for dollar” measure of its own loss, adjusted only by the tax implications that lower borrowing costs would have had on net profits.

6.

The SFO and the Dechert defendants (the latter being interested in the increased borrowing cost amendments as Part 20 defendants to a contribution claim by the SFO in the 2019 proceedings) accepted that the disputed amendments had a real prospect of success, in particular taking no point at the amendment stage that the loss claimed was irrecoverable as reflective loss, and made no objection on the ground of cogency or particularisation. The ground of opposition was that the delay in advancing the amendments, for which there was no good reason, meant that, whereas ENRC’s documents had been preserved since 2013, no “litigation hold” had been placed on the documents of some of the subsidiaries in question, to the substantial prejudice of the defendants.

7.

By order dated 14 February 2025 the Judge dismissed the applications in respect of the disputed amendments for reasons he had given in his judgment dated 23 January 2025, largely accepting the defendants’ objections. ENRC appealed that decision with permission granted by Males LJ.

8.

Following the hearing of the appeal, and to assist the parties in preparing for the Phase 2 trial due to start in April 2026, this Court made an order on 23 July 2025 allowing the appeal and permitting the disputed amendments, with judgments to follow. These are my reasons for joining in the decision to allow the appeal.