Litigation Developments: England And Wales – Quarterly Update

Welcome to our latest quarterly bulletin which contains updates on commercial litigation developments over the past three months, largely by reference to articles posted to our Litigation Notes blog in that period.

Other posts are available on the blog, which you can visit any time, or subscribe to be notified of the latest updates: https://www.hsfkramer.com/notes/litigation/.

We have also released two general episodes of our Commercial Litigation Update podcast, here and here, which discuss some of the developments covered in this bulletin, along with our special edition on force majeure here and the second episode of our new podcast series "Cross-examining AI".

Members of the team have also authored the England and Wales chapter for the 2026 edition of the Law Over Borders Commercial Litigation Guide, which provides a practical overview of litigation, arbitration and alternative dispute resolution across 39 international jurisdictions.

JURISDICTION

A number of recent cases have considered the circumstances in which the English courts have jurisdiction over a dispute.

The Court of Appeal has dismissed a bank's challenge to the jurisdiction of the English courts under the consumer jurisdiction provisions of the Civil Jurisdiction and Judgments Act 1982. The court held that a wholesale update of banking terms amounted to the conclusion of a new contract, meaning that the contract was concluded at a time when the customer was domiciled in the UK and the bank was directing its commercial activities to the UK. This entitled the customer to bring proceedings in England. The decision establishes the test for deciding whether variations to an existing contract mean that a new contract has been "concluded" for the purposes of the consumer jurisdiction provisions – namely, whether the variation was of such magnitude that it created a new legal relationship, rather than merely updating or amending the existing contract: Court of Appeal finds wholesale update of banking terms amounted to conclusion of new contract for purposes of consumer jurisdiction rules.

A Commercial Court decision has illustrated that the risk of parallel proceedings is inherent in asymmetric jurisdiction clauses. Accordingly, an asymmetric jurisdiction clause in favour of the English court will not typically allow the party with the benefit of the clause to restrain any English proceedings issued by a counterparty if it exercises its option to commence proceedings elsewhere. If this is intended, it will need to be clearly stated in the clause. Conversely, the fact that a counterparty has commenced proceedings in England, as it is required to do under the clause, will not prevent the party with the benefit of the clause bringing an action elsewhere. If that were the case, it would frustrate the key commercial purpose of the clause, which is to make it easier for the party with the benefit of the clause to bring an action wherever the counterparty's assets are located: Commercial Court refuses to stay English proceedings or injunct foreign proceedings envisaged by asymmetric jurisdiction clause.

In a judgment involving an alleged cryptocurrency fraud, the Commercial Court has continued a freezing order obtained against persons unknown over various accounts holding crypto assets. The court held that there was a good arguable case that, where crypto assets were taken from an individual resident in England and Wales, damage was sustained within the jurisdiction for the purposes of the tort gateway in Practice Direction 6B, paragraph 3.1(9). The court emphasised the importance of taking a realistic and pragmatic approach to the jurisdictional gateways, noting that debates over where crypto assets were located in a technical sense were unlikely to provide a sensible basis for identifying the appropriate jurisdiction.

Notwithstanding this decision, the question of which courts should have jurisdiction over disputes concerning digital assets remains unsettled: Commercial Court finds good arguable case that, where cryptoassets were taken from an English resident, damage was sustained in England.

Turning away from the English court's jurisdiction to hear a dispute, a recent Court of Appeal decision exemplifies the principle that the English court has inherent jurisdiction to do whatever is just and convenient to make its orders effective. The court held that, where an officer of a corporate judgment debtor deliberately fails to comply with an order pursuant to CPR 71 requiring them to attend court for examination, the court has an inherent power to order them to attend for further examination for the purposes of procuring the outstanding information. An individual cannot, therefore, circumvent a CPR 71 order by failing to turn up for the examination or by refusing to answer questions or failing to answer them truthfully. Nor can an individual escape the process by resigning from office or leaving the jurisdiction before their scheduled examination: Court of Appeal finds court retains jurisdiction to order further examination of judgment debtor until information provided.

DISCLOSURE AND PRIVILEGE

A number of recent cases have considered the scope and boundaries of privilege.

Notably, the High Court has held that legal advice privilege applies to "intra-client" communications – ie internal communications between members of the client group and/or documents created by members of that group – so long as they are prepared for the dominant purpose of seeking legal advice. The case potentially expands the application of legal advice privilege beyond lawyer/client communications, contrary to the law as generally understood before the decision. It does not, however, affect the narrow interpretation of "client" to include only those within the client organisation who are responsible for seeking or obtaining legal advice on its behalf (and not those who simply have information that the lawyers need in order to advise). The claimant has been granted permission to appeal: High Court finds legal advice privilege is not limited to lawyer/client communications but extends to "intra-client" communications.

First published in 2012, we recently updated our "Handy client guide to privilege" to reflect recent case law, including the decision discussed above. Given technological advances, we have also updated the practical tips to include a section on using AI: Handy client guide to privilege – newly updated.

The Upper Tribunal has held that the question of whether the then Prime Minister had sought legal advice on the lawfulness of the Covid-19 lockdown announced on 23 March 2020 was itself covered by privilege. Although the decision arose in the context of FOIA, it is of more general application. It illustrates that, while the mere fact of obtaining legal advice is not privileged, the fact of obtaining legal advice on a specific topic can attract privilege: Upper Tribunal finds privilege applied to whether Boris Johnson sought legal advice on the lawfulness of the Covid-19 lockdown.

The High Court has confirmed that a litigation funder cannot assert litigation privilege over communications prepared for the dominant purpose of assessing the commercial viability of a claim - even if that includes an assessment of its merits. The decision is a useful reminder that, even where funders are closely involved in considering the merits of potential claims, litigation privilege can only apply where the dominant purpose is to obtain legal advice or information/evidence for the conduct of the litigation and not matters of funding: Litigation funding and privilege: High Court finds litigation privilege does not apply to communications prepared to enable funders to assess whether to support a claim.

Turning to disclosure, the judiciary-led Disclosure Review Working Group (DRWG) is considering simplification of the disclosure rules for the Business and Property Courts under Practice Direction (PD) 57AD following a survey of legal sector stakeholders. The majority of respondents to the survey did not agree with the statement that the reforms in PD 57AD had been a success. Concerns were expressed that the regime had led to increased costs, had increased the burden on the courts, and had not achieved a culture change involving greater cooperation between the parties – though some aspects of PD 57AD were regarded as helpful, including initial disclosure and the disclosure of known adverse documents. The working group will consult on its proposals before finalising any recommendations: Disclosure Review Working Group considering simplification of PD 57AD disclosure regime following survey.

COURTS

The Lady Chief Justice and the Lord Chancellor have announced that a new Business and Property Division will be created, with the aim of modernising the structure of the High Court. The new Division will be led by the current Chancellor of the High Court, Sir Colin Birss, who will assume the title of President of the Business and Property Division. The reforms are aimed at strengthening the international reputation of the Business and Property Courts, making it easier for court users to understand where to bring their cases, simplifying governance arrangements and supporting flexible judicial deployment. The announcement states, however, that the individual courts and lists that make up the new Division will continue their work as they do now, keeping their existing jurisdictions, identities and areas of expertise: Creation of new Business and Property Division of the High Court announced.

The Commercial Court has issued what appears to be the first judgment on Filing Modification Orders (FMO) under the access to public domain documents pilot. The court held that the starting point when considering a FMO application is that non-party access to court documents without a court order is important for reasons of open justice and transparency. When it comes to modifying such access, the court must balance the value of the information in advancing open justice against the risk of harm that uncontrolled disclosure may cause to the judicial process or to the legitimate interests of others: Commercial Court issues first judgment on Filing Modification Orders under document access pilot.

CLASS ACTIONS

The Law Commission has launched a new project to assess whether the enforcement of consumer laws could be strengthened through the introduction of a consumer class actions regime. The project will identify the associated benefits and risks and make recommendations as to the design of such a regime if it were to be introduced. Specific issues that the Law Commission will consider include: what should constitute a "consumer law claim"; the criteria and process for commencing a class action; and whether the regime should allow for "opt-in" as well as "opt-out" claims. Stakeholders have been invited to complete, by 30 October 2026, an initial scoping questionnaire, which asks for views as to the benefits and risks of an opt-out consumer class actions regime, among other matters. HSF Kramer will be submitting a response to the questionnaire: Law Commission to consider introduction of opt-out consumer class actions regime.

CIVIL FRAUD AND ASSET TRACING

The Court of Appeal has held that the intervention of third-party fraudsters broke the chain of causation between a seller's assumed breach of a contractual confidentiality clause and a buyer's loss. The decision illustrates that, ordinarily, a third party's fraudulent acts will break the chain of causation between a defendant's breach and a claimant's loss. The exception is where the defendant owes a duty to protect the claimant against the very type of fraud committed. This decision suggests that a contractual confidentiality clause will not ordinarily fall into that category: Court of Appeal holds fraudsters' intervention broke chain of causation.

A couple of High Court cases have grappled with how legal concepts apply to the realities of corporate structure:

• The High Court has held that a sole director and the company he controlled could together be liable for the tort of unlawful means conspiracy. The decision shows that, for the purposes of this tort, the requirements for a combination or agreement between two or more persons, and for “concerted action” between them, may be met where there are two separate legal persons even if one is an agent of the other. There is no requirement for the parties to be two separate psychological actors, as is the case in criminal law: High Court finds agreement between a company and its sole director may form basis for unlawful means conspiracy.
• The Commercial Court, on the other hand, has confirmed that corporate dishonesty cannot be pieced together from the innocent states of mind of different executives. The decision arose in a claim for fraudulent breach of warranties contained within an SPA. As in many M&A transactions, the buyer had taken out warranty and indemnity ("W&I") insurance and, in return, waived its right to bring warranty claims unless they arose from the seller's fraud or wilful misconduct. Despite finding that a warranty had been breached without being adequately qualified by disclosure, the court dismissed the claim in its entirety, as there was no single individual who knew the relevant facts, knew enough about the warranty to appreciate that those facts were material to it, and knew (or was reckless as to whether) the warranty was false: Commercial Court decision confirms corporate dishonesty cannot be assembled from the innocent states of mind of different executives.

Another High Court decision has confirmed the court's robust approach to asset tracing and recovery. The court granted summary judgment in favour of a company in liquidation, establishing a constructive trust over properties acquired using funds wrongfully diverted by its former directors in breach of their fiduciary duties. Although the defendant was not a party to earlier proceedings against the directors, the court held that it was bound by the factual findings made in those proceedings as a privy, and that it would in any event be an abuse of process to permit the defendant to re-litigate those findings. Applying well-established tracing principles, the court further held that the claimant was entitled to trace its assets into the properties and that a constructive trust should be imposed, all the elements of a knowing receipt claim being clearly satisfied on the facts: High Court imposes constructive trust over properties purchased with misappropriated company funds.

Finally, a recent High Court case has highlighted the limits of the existing legal framework in the context of more novel asset types. The court declined to extend the traditional tort of conversion to crypto assets, holding that it was bound by existing authority to confine the tort to tangible goods despite the statutory recognition of a potential third category of property: Digital property and the limits of conversion: High Court strikes out conversion claim for misappropriation of Bitcoin.

CONTRACT

Two High Court decisions have shown that persuading the English court to correct a drafting error by construction (known as the Chartbrook principle) is no easy feat. First, it must be clear that the contract contains a mistake – which requires showing that the literal interpretation would be irrational or absurd rather than merely imprudent or unwise. Second, and importantly, it must be clear how that mistake should be corrected.

Where the counterparty puts forward an alternative correction that may also be appropriate, the court may conclude that the mistake cannot be interpreted away. In such circumstances, the party seeking a correction will need to plead and prove a case in rectification: High Court decisions illustrate limitations of Chartbrook principle which allows court to correct drafting errors by interpretation.

ADR

While the English court's endorsement of ADR is longstanding and enshrined in the CPR, the court recognises that ADR is not always appropriate. By way of example, the Technology and Construction Court has recently held that neither a successful defendant's refusal to mediate nor a last-minute change in its expert's evidence warranted a departure from the usual order that it should be paid its costs of the litigation. The defendant's refusal to mediate was not unreasonable in circumstances where the claimant had failed to engage with a number of issues that the defendant had raised and where the defendant needed to understand the claimant's expert evidence in order to proceed with mediation. The defendant had also proposed other forms of ADR and made settlement offers throughout: Refusal to mediate was not unreasonable and did not warrant costs sanction.

INSOLVENCY LITIGATION

The Board of the Privy Council has refused permission for a director of a Mauritian company in liquidation to continue a claim on behalf of the company, instead of the liquidators. The Board confirmed that the court can authorise someone other than a liquidator to pursue a claim in the name of a company. However, it held that permission can only be given to those with a genuine economic interest in the liquidation – namely creditors and (where a surplus is likely) contributories. The fact that a director may be entitled to apply to court for general directions under the insolvency statute is irrelevant and does not afford them a right to bring or continue an action in the company's name: Privy Council confirms directors have no standing to bring claims in the name of a company in liquidation.