Commercial litigation: Predictions for 2014

Mitchell

The high profile Court of Appeal decision in Mitchell was the most talked about decision of recent times in civil litigation. The intended (and unintended) consequences of the decision will be felt throughout 2014. The courts are likely to face an increase in the number of contested applications for relief from sanction as parties test what amounts to a 'trivial breach' or 'good reasons' for the breach.

The myriad different factual scenarios which may result in a breach and the different nature of those breaches mean that litigators are likely to take some time to establish how a court will assess the application. A greater number of interim applications must also be anticipated where parties proactively seek assistance from the court to prevent them being in breach of court rules and orders in the first place.

Where those interim applications or subsequent applications for relief from sanction fail, there are also likely to be consequential professional negligence claims waiting in the wings. Contrary to the suggestion in Mitchell that this more robust approach to compliance will prevent satellite litigation and improve the litigation process, at least in the short term, that is unlikely to be the case.

Libor litigation

There are also going to be some significant cases coming to trial in 2014. Perhaps the most notable, and one which the banking community has been following with great interest for some time, is Guardian Care Homes v Barclays. This has become known as the 'Libor test case' as it is to be the first UK High Court case concerning the alleged fraudulent manipulation of Libor rates. GCH is seeking to rely on alleged Libor-rigging by the Bank to invalidate two interest rate swaps it entered into in 2007 and 2008.

Permission was given in October 2012 for the case to proceed to trial but Barclays appealed that decision out of time. On 8 November 2013, the Court of Appeal rejected Barclays' attempts to have the £70m case dismissed. A provisional trial date has now been set for 29 April 2014. The Court of Appeal has also ruled that similar claims made by the Indian real estate developer Unitrech against Deutsche Bank can continue to trial. If the cases go against the Banks there is likely to be a flood of similar claims in light of the number of Libor referenced deals entered into over the years. In any event, financial services litigation is set to continue across the board in 2014 as is financial regulatory work.

The 'Woolworths' case

There are also important decisions pending from the Court of Appeal in other commercial areas. Those practising in employment, for example, are awaiting the Court of Appeal's decision in case of USDAW v Ethel Austin Ltd (in administration) ("the Woolworths case") where the EAT has given the Secretary of State permission to appeal on the definition of 'establishment' for the purpose of section 188 of the Trade Union & Labour Relations (Consolidation) Act 1992. The case is significant for employers in determining the extent of their collective consultation obligations and is currently due to be heard by the Court of Appeal in January 2014. There is also the possibility of an increased scope for competition damages claims to be brought in England in light of the Court of Appeal judgments of 2013 and there are significant reforms proposed to the Competition Appeal Tribunal rules which are to be debated over 2014.

More generally, there continue to be proposals to amend the procedural rules relating to commercial claims. In particular, the Ministry of Justice has issued a consultation proposing substantial court fee increases. The consultation closes on 21 January 2014 and the proposed changes are anticipated to be implemented in Spring 2014.