Kennedys strike out £58 million conspiracy claim

Kings v Steifel and others [26.04.21]

The Commercial Court has struck out a £58 million unlawful means conspiracy claim against Teacher Stern LLP, Primekings Holding Limited (Primekings) and Paul Downes QC.

The judgment provides a helpful reminder of the requirements for pleading an unlawful means conspiracy. It also addresses principles of issue estoppel, abuse of process, without prejudice privilege and advocates’ immunity from suit.

The facts

The claim arose from misrepresentation proceedings brought by Anthony, James and Susan King (the Kings) against Primekings and others in 2015. Teacher Stern and Paul Downes QC (PDQC) acted for the defendants. On day 10 of a 20-day trial, following advice from their counsel, the Kings discontinued their claim, apologised to the defendants and agreed to pay indemnity costs.

The Kings subsequently brought fresh proceedings in the Commercial Court against Primekings, Teacher Stern and PDQC alleging that, during the course of the misrepresentation proceedings, the defendants had combined unlawfully to bring about the discontinuance of the Kings’ claim. Amongst other things, the Kings asserted that the defendants had participated in a “common design” featuring three objectives:

  • To pressure the Kings’ legal team to discontinue by misleading the Kings into believing they would be liable for greater adverse costs than Primekings knew they would incur and by using threatening conduct to intimidate the Kings and their representatives (the “discontinuance goal”). The Kings relied upon three ‘pleaded threats’ and upon various other matters from which it was said that similar threats could be inferred.
  • To enrich Primekings and Teacher Stern by obtaining a costs order for allegedly inflated costs (the “enrichment goal”).
  • To cover up the above.


A further unpleaded case was advanced by the Kings during the course of their submissions:  it was asserted that the defendants, having become aware of errors made by the Kings’ legal team during the trial of the misrepresentation proceedings, either: (i) conspired with the Kings’ representatives to bring about the discontinuance or (ii) exploited those errors through threatening conduct, causing the claim to be withdrawn.

Each of the three sets of defendants applied for the claim to be struck out and/or reverse summary judgment given.

Decision

The Honourable Mrs Justice Cockerill found that the claim failed in its entirety because no complete cause of action had been pleaded by the Kings or could be pleaded:

  • As regards the discontinuance goal, the pleaded threats were not causative of the discontinuance, this having been conceded by the Kings’ counsel during the course of the hearing.
  • As regards the unpleaded claim, the Kings could not show that the defendants had the requisite knowledge of the alleged negligence of the Kings’ legal team or their alleged failure to disclose that negligence to the Kings.
  • As regards the enrichment goal, no separate loss could be said to arise out of the costs representations and there was no real prospect of it being held that the representations caused the discontinuance.


As to the merits of the claim, Cockerill J found that the pleaded case was insufficient to withstand summary judgment, and there was no basis in the unpleaded case for any inference of threats which would have more than fanciful prospects of success. The claim was found to be “structurally fatally flawed, abusive and lacking in pleadable substance.”

Having held that the entirety of the claim should be struck out and/or reverse summary judgment granted. Cockerill J considered the following discrete arguments on legal principles raised during the course of the hearing.

Issue estoppel

The defendants argued that it was not open to the Kings to challenge whether there was an enforceable costs liability in the misrepresentation proceedings as costs had been conclusively determined via detailed assessment.

Cockerill J agreed, noting that identical arguments as to enforceability had been taken by the Kings in the Points of Dispute but subsequently withdrawn. The issues could and should have been pursued at detailed assessment, and the decision to raise them instead in the conspiracy claim was a “blatant attempt to go behind … the decision on the detailed assessment”.

CPR 38.7/abuse of process

Cockerill J concluded that CPR 38.7 was engaged on the basis that the claim was fundamentally about the merits of the misrepresentation proceedings and was based upon the same facts. It would be an abuse of process for the Kings to seek to go behind the discontinuance.

Counsel’s immunity from suit

In relying on statements made by PDQC in the underlying proceedings, the Kings argued that counsel’s immunity from suit for statements made in court had been abolished following Hall v Simons [2002].

Cockerill J found that, aside from specific carve outs made by Hall v Simons and Jones v Kaney [2011], the immunity remains.

Mediation/without prejudice privilege

The Kings also submitted that a statement made by Primekings in a mediation statement in the underlying proceedings had lost the benefit of privilege as they were made with the intention of applying “improper pressure in contempt of court”.

 Cockerill J found that, while frank (as one would expect a mediation statement to be), the statement fell “squarely within the ambit of the cases where the court has said that the necessary hurdle of “unambiguous impropriety” has not been met.”

Comment

This decision is a welcome example of the court’s willingness to take a proactive approach to determining cases where it would be contrary to both principle and the Overriding Objective to allow them to proceed to trial.