Consequential issues in the Commercial Court

After a judgment has been handed down, the parties may ask the court to deal with various consequential issues arising from the judgment (for example, permission to appeal, costs). However, resolving consequential issues in the Commercial Court is becoming increasingly difficult, especially in circumstances where a short hearing becomes necessary.

The problem is illustrated by two recent decisions. In Royal & Sun Alliance Insurance Ltd & others v Tughans [2022] EWHC 2825 (Comm), Mr Justice Foxton lamented the substantial length of the written submissions of the parties, and the delays and resources incurred in dealing with the application for permission to appeal. He noted that such issues ‘have made it clear that a change in approach to the resolution of consequential issues is desirable’.

Similar observations were made by Mr Justice Jacob in the earlier case of Contra Holdings Ltd v MJC Bamford [2022] EWHC 2799 (Comm).

Judicial concern

It is fitting to start with Lewison LJ’s memorable remarks in Fage UK Ltd v Chabani UK Ltd [2014] EWCA Civ 5, [114] on an attempt to advance arguments on appeal that had not featured at trial. His lordship said ‘the trial is not a dress rehearsal. It is the first and last night of the show’. That observation equally applies to an application seeking permission to appeal.

In Contra Holdings Ltd the hearing took place on 8 July 2022 and judgment was handed down on 18 July, but the consequential hearing was deferred to August 2022. Jacob J observed that an increasingly common, but regrettable, feature of Commercial Court litigation was the apparent difficulty in counsel making themselves available for a hearing of consequential issues. If the hearing had taken place quickly it was unlikely that the application before Jacob J to amend would have been made. He explained that delayed consequential hearings create an increased amount of work for the parties and the judge, who has to deal with a case many weeks after judgment has been given, when it is no longer fresh in their mind. It also means that the parties rethink and try to salvage a case which has been lost. Jacob J concluded with a stark warning when he said: ‘Commercial Court judges will be far less tolerant in the future of consequential hearings being delayed because of the unavailability of counsel, and will fix consequential hearings to take place within a short time after judgment.’

In Royal & Sun Alliance Insurance Ltd the judgment was handed down on 13 September 2022 and the hearing dealing with consequential issues, after a substantial delay and lengthy submissions, took place on 9 November. Lamenting his decision to agree to the parties’ timetable, Foxton J explained that time is not reserved in judges’ diaries to deal with lengthy disputes about consequential matters, ‘a task which becomes more time-consuming the longer the period which has elapsed from the provision of the draft judgment to the parties’. He also explained that resolving consequential issues based on written submissions is not intended to involve a substantial departure from the way in which these issues are traditionally dealt with at short oral hearings immediately following the handing down of judgment. Nor was it appropriate or realistic to expect the court to grapple with lengthy written submissions on permission to appeal which exceed the length of the submissions addressing those issues filed for the hearing.

Prompt resolution

Jacobs J in Contra Holdings Ltd observed that judges of the Commercial Court will be keen to ensure that consequential issues are resolved promptly after hand-down, and in a proportionate manner. This will involve:

• Hand-downs of judgments taking place promptly after the provision of the draft judgment to the parties.
• Consequential matters being determined much more frequently at short oral hearings, of the order of an hour for hearings other than significant trials, which the court will look to fix within seven to 14 days of hand-down. It should not be assumed that such a hearing will be fixed for the convenience of all counsel involved, where this would be incompatible with a prompt determination of any consequential issues.
• If consequential issues are to be dealt with on paper, then for most hearings this will be on the basis of a timetable which will be completed within the same period.
• The fixing of strict page limits on the length of skeletons and submissions. In particular, the 15-page limit for ordinary applications of half a day or less should be sufficient in most cases to deal with consequential issues other than those arising after significant trials.

It is clear that hearings to deal with consequential issues have become a particular problem in the Commercial Court. They should not be seen as an opportunity for parties to revisit the issues, nor should they be delayed or be used by the parties to burden the court with overly lengthy submissions. The parties are under a clear duty to assist the court in furthering the overriding objective. The courts will expect that duty to be discharged at all stages of the litigation process, including when dealing with consequential issues. To avoid any adverse consequences, parties in the Commercial Court would be wise to carefully follow the guidance given by Jacob J in Contra Holdings Ltd.

Masood Ahmed is an associate professor at the University of Leicester and research fellow on the Vici Affordable Access to Justice project, Erasmus University, Netherlands