Evidence - 2015 in review

Mark Surguy takes a look at the area of evidence and developments generally affecting his fraud practice.

Mark Surguy takes a look at the area of evidence and developments generally affecting his fraud practice.

What legal developments have had the biggest impact on your practice in 2015?

The need for co-operation with one's opponent over the management of large volumes of digital data. While this is not new for 2015, the ongoing change in litigation culture continues to take hold. The adversarial and combative approach in matters relating to the preparation of the evidence is (slowly) being replaced by a more solution-focussed and co-operative approach. The other development is that sources of information continue to proliferate creating the potential for being overwhelmed with information.

How have these affected your ongoing cases and working life? How have you dealt with these on a practical level?

Much more planning and preparation is required at the start of a case. Technology has to be embraced in most cases to capture and assess the evidential value of the corpus of corporate data. This means maintaining good quality relationships with the providers of the technology. Practically, clients have to be educated in the importance of managing digital information and how this can be best achieved through the use of technology. High quality meeting management skills are required to navigate the interest groups inside and external to an organisation. Getting hold of the required data from which to manage the case continues to be a real challenge. In terms of managing the overwhelming sources of information, research skills and distinguishing the relevant from the irrelevant sound simple, but require constant honing.

What were the key cases/decisions this year on evidence and why were they significant for practitioners?

Smailes v McNally [2015] EWHC 1755 (Ch), [2015] All ER (D) 232 (Jun)

Smailes v McNally (the Atrium Training case) is a salutary reminder of the ultimate sanction if the management of digital data and documents in heavyweight litigation is not efficient and proportionate, namely the striking out of the claim altogether. The challenges in handling both digital and paper evidence are present in most cases these days. The risks are considerable and if the evidence management goes wrong it can go very wrong. Practitioners have got to get to grips with these challenges. A common mistake is to delegate the document management to the most junior person in the team. Senior input is required.

What were the biggest practical challenges in this area for you and your clients/customers and how did you address them?

Handling the constantly increasing volumes of corporate data needed for a case. My approach to this is to call a multi-disciplinary meeting at the outset and get all the stakeholders talking from the start, working together to locate, retrieve, process and efficiently review the data to isolate the evidence. This does not have to be an onerous task.

Have all of the expected developments of 2015 come to pass?

The Dorchester Group Limited v Kier Construction Limited [2015] EWHC 3051 (TCC)

Not quite. 2015 was to hail the greater and more effective use of budgets in litigation. While these are a good idea, in more complex cases they highlight the real difficulty of trying to predict the shape of a dispute. Forecasting is neither art nor science but speculation. It is inherently unreliable. For example in The Dorchester Group Limited v Kier Construction Limited the defendant spent some £500,000 on disclosure in circumstances where the court had fixed the budget for disclosure at £120,000 (the defendant having previously asked for a fixed budget of £146,000). The disclosure exercise was described as cumbersome, inadequate and neither reasonable nor proportionate.

How has your business developed in 2015? Has this been a good year for work in your area?

Most of my work is fraud-related. The increasing complexity of the issues that arise in this area means there is a constant demand for advice. Major fraud cases are not as common as may be thought and 2015 has been somewhat unremarkable.

How has the profile of your clients developed? Can you identify any trends in your clients or types of cases?

I cannot detect any real change in the client profile. The boundaries of the different disciplines within professional services are increasingly blurred causing competitive pressures in many areas. Legal services are being delivered more and more by in-house legal teams who are then in effect both clients and competitors at the same time. A decreasing loyalty to a brand is seeing work being moved around between law firms. The continued trend toward cross-border related cases is demonstrable, reflecting globalisation in commerce. I would like to see more portfolios of work coming in because it is far easier to mitigate the risks and maximise efficiencies of a larger population of cases. The one-offs which suddenly settle create do not benefit from those synergies.

How is 2016 shaping up in terms of important cases and legislative developments?

AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbh [2015] EWCA Civ 143, [2015] All ER (D) 304 (Feb)

There is an appeal before the Supreme Court in AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbh on exclusive jurisdiction clauses. German lawyers are accused of having induced AMTF's clients to take proceedings against them in Germany in breach of a contractual clause granting exclusive jurisdiction to the High Court in England. The judge at first instance decided that the High Court had jurisdiction to hear the case but this was reversed on appeal. The case is actually about the tort of inducing a breach of contract. I had a fraud case last year where my attempt to use this cause of action failed, so I am interested to understand what the Supreme Court has to say on the subject. One of the questions is likely to be whether, in ignoring the jurisdiction clause, any damage suffered occurs in the country in which the proceedings are taken in defiance of the clause or in the jurisdiction in which the proceedings should have been issued pursuant to the clause.

One legislative development we may see is the Enterprise Bill coming into law. While the detail is still being finalised (it is next due for its third reading in the House of Lords, then it will go to the House of Commons for debate), the introduction of a scheme of measurement of the economic impact of regulators' policies and practices sounds like a good thing, yet it requires yet another regulatory regime to do so. The government says it wants to deregulate but one can be forgiven for thinking that more regulation in order to achieve less regulation is self-cancelling. Regulating the behaviour of businesses rather than permitting greater freedom and granting proper access to modernised courts if problems arise is not necessarily the best approach. I cannot help thinking that this is the big difference between Europe's economy and that in the US.

How will these developments affect your cases and working life?

Fraud lawyers have to grapple with unusual causes of action and often resort to equitable relief and economic torts. The boundaries of these torts are not always clear and I am keen to see whether there is going to be more clarity around deploying some of these claims in the future in fraud cases. The introduction of more regulation cannot be a good thing, but if the new measurement regime promised by the Enterprise Bill facilitates a deeper realisation of the damage over-regulation is causing in so many sectors then, in the long term, the changes will benefit the common lawyer. We may well see more challenges to the activities of regulators in some sectors.

What would you like to see in 2016?

More cases brought outside London. The mercantile courts are a great forum for resolving commercial cases quickly and at less expense than in London. Clients are still paying much more than they need to in many cases to get the legal solution they need.

How might the expected developments in 2016 affect your business and clients?

Clients want results - commercial results, in other words an outcome that is justified by reference to the costs incurred. The cost of litigation still remains a major concern to businesses. The increase in the court fees this year will continue to drive businesses to seek solutions via mediation, although mediations themselves are not necessarily a low-cost solution. I continue to believe that proportionate solutions are available through the courts providing that cases are managed smartly and technology is deployed and used properly.

This article was first published on Lexis®PSL Dispute Resolution on 17 December 2015.

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