A Court of Appeal judge has criticised parties for their ‘cavalier approach’ to litigation and sent a warning that this will no longer be tolerated.
Ruling in The Prudential Assurance Company v HM Revenue & Customs, Lord Justice Lewison (pictured) said the case involving dividends paid on shares in foreign companies had been running since April 2003 and it still ‘remains to be seen’ whether an end is in sight.
Apart from the ‘inordinate’ length of time, Lewison said the other feature of the litigation was the failure of both parties to explain what they were arguing.
Prudential, said the judge, had pleaded a claim in its particular of claim in ‘very general terms’ without any of the factual allegations that would usually be expected. Equally, the defendant HMRC had pleaded in very general terms.
‘In both cases important matters of contention were simply not identified in the pleadings, so that anyone reading them would have had very little idea about what was actually in issue,’ said Lewison.
The judge said former lord chief justice Lord Woolf had sought in the past to restrict the number of steps litigants must take, but this did not suggest that basic steps in litigation should be ignored.
Lewison said the setting out of a party’s case was ‘inimical’ to a fair hearing, enabling the other party to know what points are in issue, what documents to disclose, what evidence to call and how to prepare for trial.
He said it was agreed that by the time skeleton arguments for trial were served each party would know the points in issue, but this was not sufficient.
In days gone by, he explained, the court would routinely allow late amendments to statements of case, but in more recent times attitudes have changed, and it is now the case that the court requires strong justification for a late amendment.
Lewison said from the opening of the appeal by HMRC ‘it soon became clear that the lack of pleadings meant that the parties disagreed about what was the scope of the trial; what were the issues that the judge had to decide; whether points had or had not been raised; whether or not they could be raised on appeal; and even what the judge had decided.
‘This is no way to conduct litigation involving millions of pounds. We were told that this unacceptably cavalier approach to pleadings was a common feature of this kind of litigation. It must stop.’
As it was, the lack of any formal statements of case to define the issues for trial meant the court spent a day and a half deciding which points were open to HMRC to argue.
The Court of Appeal upheld the Prudential appeal on three issues but otherwise dismissed it.