Anonymised Summary of Judgment

Factual and Procedural Background

The Plaintiffs (a wealthy individual and a related company) alleged that the Defendants, a group of companies and individuals, induced them into a Stock Lending Agreement under false pretences and misappropriated valuable shares. The Plaintiffs obtained without-notice worldwide freezing orders and later commissioned Company A, a private investigative firm, to carry out a covert operation targeting a partner ("Solicitor") at the Defendants' former solicitors. Company A, posing as a prospective client, induced Solicitor to disclose confidential and potentially privileged information; the meetings were recorded and the recordings provided to the Plaintiffs. The Plaintiffs' original solicitors (Law Firm A) refused to view the material and were replaced by Law Firm B, who used the recordings when pursuing a summary judgment application. The Defendants applied to strike out the claim as an abuse of process and alternatively sought discharge of the freezing orders. At first instance Judge Houseman found the operation abusive, struck out the Plaintiffs' summary judgment application and deferred detailed determinations about privilege and admissibility to an "Information Review Hearing". The Plaintiffs appealed; the Defendants cross‑appealed seeking strike out of the claim and/or discharge of freezing orders. This Court heard the appeal.

Legal Issues Presented

1. Whether obtaining an opponent's confidential and privileged information by dishonest covert means ('privilege hunting') constitutes an abuse of the process of the English court.
2. If it is abuse, whether striking out the Plaintiffs' summary judgment application (as done by the Deputy Judge) was an appropriate and proportionate response.
3. If not, what is the appropriate and proportionate response, including whether freezing orders obtained by the Plaintiffs should be discharged.

Arguments of the Parties

Appellant's Arguments

• The Deputy Judge was wrong to treat the conduct as a category of abuse concerned 'solely with the quality of behaviour' rather than requiring assessment of impact on the proceedings.
• The material obtained was not privileged or was within the iniquity exception; the Deputy Judge should have determined admissibility and entitlement before striking out the summary judgment application.
• The public interest in exposing fraud supported allowing the summary judgment application to proceed.

Respondent's Arguments

• The only appropriate sanction for suborning an opponent's solicitor to obtain confidential or privileged material is striking out the claim unless there are compelling reasons otherwise.
• The Deputy Judge erred by considering the Plaintiffs' prospects of success and by taking into account the Solicitor's culpability in mitigation of sanction.
• Deterrence required a severe response to privilege hunting.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court analysed whether covertly obtaining an opponent's confidential and privileged information by deception amounted to an abuse of process. It began from established authorities explaining the court's inherent power to prevent misuse of procedure and emphasised that abuse categories are not closed. The Court accepted the Deputy Judge's factual findings that Company A's operation, sanctioned by the Plaintiffs, used elaborate deceit to target Solicitor and to obtain recorded disclosures of confidential and privileged material, and that the Plaintiffs expected to benefit from that material.

The Court held that privilege and the solicitor‑client relationship are central to the administration of justice and that suborning an opponent's solicitor by deception to obtain confidential material is a serious corruption of the litigation process. It rejected the Plaintiffs' contention that abuse must always be framed solely by its impact on the possibility of a fair trial, finding instead that conduct can be abusive by reference to its quality and its effect on the integrity of the system even before final determinations on evidential admissibility.

On proportionality, the Court applied Summers and related authorities: striking out is a last resort and must be proportionate. The Court agreed that the Deputy Judge was right to refuse the Plaintiffs' summary judgment application because it relied, at least in part, on material obtained by abuse and because the iniquity exception and admissibility required detailed resolution at a fuller hearing. However, the Court found that striking out the summary judgment application alone understated the gravity of the Plaintiffs' conduct and overlooked an available and proportionate remedy: discharge of the freezing orders. The Court reasoned that the Plaintiffs knew (or must be taken to have known) of Company A's operation at or about the time they sought without‑notice freezing relief and that, had the court been informed, the discretionary freezing orders would not have continued. Discharging the freezing orders would deprive the Plaintiffs of advantages they obtained while acting in bad faith and would better protect the court's process without extinguishing the Plaintiffs' substantive claim at this stage.

The Court also explained that whether some material falls within the iniquity exception remained undecided and that the trial judge should determine the extent to which the Plaintiffs' abusive conduct, if proven, should affect equitable or discretionary remedies.

Holding and Implications

HOLDING: The Court concluded that the Plaintiffs' conduct in sanctioning and benefiting from Company A's covert deception of the Defendants' Solicitor constituted an abuse of the process of the court. The Court dismissed the Plaintiffs' appeal against that finding. It allowed the Defendants' cross‑appeal to the extent of ordering that the freezing orders obtained by the Plaintiffs be discharged, but it declined to strike out the Plaintiffs' claim, which will proceed to trial.

Implications:

• The immediate practical consequence is discharge of all freezing orders obtained by the Plaintiffs in these proceedings.
• The summary judgment application dismissed below remains struck out; the substantive claim proceeds to trial where the trial judge will decide (after disclosure and cross‑examination) whether and to what extent the Plaintiffs' abusive conduct should disentitle them from equitable or discretionary relief (including proprietary remedies, equitable compensation, interest and costs).
• The decision emphasises that suborning an opponent's lawyer by deceit is a serious abuse that the court will respond to, but that striking out a claim is a last resort requiring proportionality: other remedies (including discharge of interim relief) may be appropriate.

Judge Males delivered the leading judgment; Judges Phillips and Foxton agreed.