Disputes Briefcase

Background

Over 5,000 claimants brought claims under the Consumer Credit Act 1974 against eight motor finance companies, alleging that undisclosed discretionary commission arrangements between the lenders and car dealers rendered the credit relationship unfair. The claims were issued on eight omnibus claim forms, one per defendant. Court rules (CPR 7.3) permit a claimant to “use a single claim to start all claims which can be conveniently disposed of in the same proceedings.” The County Court judge disaggregated the claims, finding the ‘convenience’ test was not met. The High Court overturned that decision. The Court of Appeal unanimously dismissed the lenders’ appeal.

‘Convenience’ test

The Court of Appeal summarised the principles as follows:

1. The burden of demonstrating convenience falls on the claimants.
2. ‘Conveniently’ carries its ordinary meaning.
3. The test is likely met where common issues bind all or most claimants, but this is not the only relevant factor.
4. A multi-party claim form need only be a convenient means, not the most convenient means.
5. A single final trial need not be practicable.
6. The interests of all parties, the court and the wider court system must be considered.

Efficient case management is also relevant to assessing convenient disposal under CPR 7.3.

Common issues?

The Court held that common issues of law or fact need not bind every claimant. Where claims are similar in nature, arise from the same statutory provisions, and raise the same general issues – even if the underlying facts vary – common issues of law or fact are likely to exist, requiring only separate evaluation at the final stage. Although sceptical about the common issues identified by the High Court (concerning alleged breach of the FCA’s CONC rules and whether the car dealers acted as agents for the defendants), the Court of Appeal could not say the High Court judge was wrong to treat them as relevant to the convenience test.

Lead cases

The Court endorsed trial of lead cases as a convenient route to disposal, holding that persuasive – rather than binding – outcomes across a range of fact patterns would drive commercial settlement. In Johnson v Close Brothers, the Supreme Court recognised the value of an authoritative ruling for claimants with similar claims, even where the ruling could not bind them. However, the Court rejected any suggestion that a large undisclosed commission gives rise to a presumption of unfairness, reiterating that the statutory test is entirely fact-specific; the size of a commission is simply one relevant factor and does not, of itself, equate to unfairness.

Comment

The Court emphasised that this case was an “unreliable vehicle for any statement of principle or guidance” on multi-claimant claims. Notwithstanding that caveat, the judgment confirms that case management considerations are relevant to the convenience test, that persuasive rather than binding outcomes from lead cases suffice, and that disclosure obligations may be imposed on defendants even at an early stage. The decision is likely to embolden claimant firms and funders attracted by the economies of scale offered by high-volume consumer claims and may inform the approach taken in similar cases. However, the Court of Appeal flagged the “vast increase” in multi-claimant claims in recent years as warranting further consideration by the Civil Procedure Rule Committee. It remains to be seen whether the Committee will take this up.

Background

The proceedings concern claims for unlawful means conspiracy brought by a group of black cab drivers and an assignee of rights against three Uber group companies, alleging Uber misrepresented its business operating model to obtain a licence to operate in London's private hire market unlawfully.

In 2017, a litigation funder (H) instructed a claimant law firm (M) to investigate potential claims by cab drivers that included contacting the Licensed Taxi Drivers’ Association (LTDA). M was subsequently engaged by the Claimants to bring the claims, and H agreed to fund them. The claims were issued in 2024 after the limitation period had expired, and the Claimants sought an extension of time, arguing they could not have discovered the alleged fraud before June 2018. 

Ahead of a preliminary issues trial on limitation, Uber applied for disclosure of documents generated during the pre-funding period. Birt J granted the application, finding the documents relevant to what the Claimants might reasonably have discovered and that disclosure was reasonable and proportionate.

Privilege

The Court accepted that many documents might attract legal advice privilege, on the basis that a solicitor-client relationship existed between H and M, and correspondence between them may have been created for the dominant purpose of giving or receiving legal advice.

However, the Court rejected the claim for litigation privilege over communications between M and the LTDA. Although litigation was in contemplation, those communications were not made for the dominant purpose of conducting the litigation. Rather, they were created to enable H to decide whether to fund the claim. Birt J drew a clear distinction: a claimant's decision whether to litigate is part of the conduct of litigation, but a funder's decision to fund someone else's litigation is not.

Control

Birt J rejected the argument that the documents were not within the Claimants’ control. The Court held that once the Claimants became clients of M, the firm owed them a duty to disclose all material information relating to their claims – including information acquired during its earlier retainer with H – unless H had given “informed consent” to non-disclosure. A retainer clause purporting to secure such consent was held to be insufficient, as there was no evidence of any individual Claimants’ informed consent to forgoing rights to material information about their own claims.

Comment

This is an important decision for parties on both sides of funded claims. For defendants, it confirms that documents created for the purpose of enabling a funder to decide whether to fund claims will not attract litigation privilege, opening a potential avenue for defendants to obtain greater visibility of the genesis and funding of the claims. For claimants and funders, it serves as a reminder of the need to structure pre-funding investigations carefully.

The ruling on control is equally noteworthy. Where a solicitor acts first for a funder in assessing whether to fund a claim and later acts for a party in the proceedings, information gathered during the earlier retainer may be considered within the party’s control for disclosure purposes.

The decision is one of several recent privilege rulings arising from group claims, and the area continues to develop. The High Court’s decision on intra-client privilege in Aabar v Glencore (covered in our May edition of Briefcase) is being appealed to the Court of Appeal.

Background

The claimants, Mauritian investors and their US assignees, obtained arbitral awards exceeding EUR 195 million against India arising from the termination of a satellite spectrum contract and sought to enforce those awards in England. India applied to set aside the enforcement order, asserting sovereign immunity under section 1 of the SIA. The claimants argued that, by ratifying the New York Convention, India had, by prior written agreement, submitted to the jurisdiction of the English courts within the meaning of section 2(2) of the SIA, relying on the Supreme Court's analysis of Article 54 of the ICSID Convention in Infrastructure Services Luxembourg v Spain (see the Arbitration round-up in our May edition of Briefcase).

The decision

The Court of Appeal unanimously dismissed the appeal, upholding Sir William Blair's first instance decision. Phillips LJ (with whom Lewison LJ and Newey LJ agreed) held that the reasoning of the Supreme Court in Infrastructure concerning Article 54(1) of the ICSID Convention could not simply be "read across" to Article III of the New York Convention. Unlike ICSID — which is necessarily concerned with awards to which a contracting state is a party and expressly preserves only immunity from execution — the New York Convention applies to all foreign arbitral awards regardless of the parties and makes express reference to the "rules of procedure" of the enforcing territory. As state immunity is classified as a rule of procedure under both international and English law, it falls squarely within that expression. The Court noted that the appellants could not articulate any coherent definition of "rules of procedure" that included defences such as limitation but excluded state immunity. The Court’s conclusion was further reinforced by the unanimous decision of the High Court of Australia reaching the same conclusion between the same parties, and by the consistent approach taken by the German Federal Court of Justice and a US District Court.

Comment

This decision provides important clarity on the limits of the New York Convention as a gateway to enforcement against sovereign states. Parties holding arbitral awards against states cannot rely on the Convention alone to overcome state immunity; they must instead demonstrate that the state has submitted to the jurisdiction through a separate mechanism, such as an agreement to arbitrate engaging section 9 of the SIA. The emerging international consensus — now reflected in decisions from England, Australia, Germany and the United States — significantly narrows the scope for creative enforcement strategies against sovereign award debtors. Award creditors should ensure they can rely on the underlying arbitration agreement, rather than the Convention itself, as the basis for establishing jurisdiction.

The judiciary has announced the creation of a new Business and Property Division within the High Court, which will replace the Chancery Division and sit alongside the King’s Bench and Family Divisions. Among other reasons the change aims to strengthen the international reputation of the Business and Property Courts – which are currently split across the King’s Bench and Chancery Divisions and include courts such as the Commercial Court – by bringing them under a single coherent structure. The individual courts of the Division will continue their work as before. The restructure is intended to take effect in the Autumn.

The High Court has delivered a landmark judgment in the Pan-NOx litigation (Various Claimants v Mercedes Benz), largely rejecting claims brought by around 1.6 million vehicle owners alleging that major manufacturers unlawfully fitted diesel vehicles with prohibited emissions “defeat devices”.

Cockerill LJ dismissed all defeat-device allegations against Ford, Nissan and Renault, upholding only limited claims against Mercedes-Benz and Peugeot-Citroën relating to specific vehicle calibrations. The Court adopted a narrow interpretation of “defeat devices,” holding that the term captures only those devices which detect a regulatory emissions test and objectively operate with the purpose of causing the emissions control system to function more effectively during a test cycle than it would on the road. In other words, there needs to be an intention to cause the emissions control system to operate differently when it senses it is being tested.

Notably, Cockerill LJ declined to follow post-Brexit CJEU case law on the meaning of the Emissions Regulation, finding that the CJEU’s decisions appeared to contain errors and that the English court had better access to relevant material to determine the meaning of the key provisions.

A further trial is listed for October to determine the consequences of any actionable breaches and any issues relating to damages or other remedies.

The High Court has quashed four Financial Ombudsman Service decisions, holding that the FOS had unlawfully expanded its jurisdiction over consumer credit complaints by relying on a concept of “corrective responsibility” that has no basis in law (R(Barclays & Ors) v FOS).

The case arose after the FOS, following the Supreme Court's decision in Smith v RBS (see our January 2024 edition of Briefcase), adopted a new interpretation of its jurisdictional time limits. It asserted that a creditor's failure to correct unfairness in a subsisting credit relationship amounted to a continuing “event complained of,” with the effect that complaints would remain permanently in time for as long as the relationship continued. Four major banks sought judicial review of that approach and, in what is understood to be the first instance of the regulator opposing the FOS, the FCA intervened in support of the banks.

Dias J held that “corrective responsibility” could not be derived from the authorities and that the FOS’s interpretation was wrong in law. The Court drew a distinction between considering the entire credit relationship as context for assessing fairness – which is permissible – and asserting jurisdiction over the entire relationship, which is not. The Court also rejected the FOS’s alternative argument that a single in-time act could open jurisdiction for the whole credit relationship.

The ICC's revised 2026 Arbitration Rules entered force on 1 June 2026 and apply to arbitrations commenced from that date. They introduce targeted updates aimed at enhancing efficiency, clarity and case management. Among the most notable changes is dispensing with the requirement for a mandatory Terms of Reference – a document which typically sets out the parameters of the dispute and important procedural information for the arbitration, but which attracted criticism by adding unnecessary cost and delay. Other changes include:

• a new ‘highly expedited’ arbitration procedure;
• an increase in the threshold for the existing expedited procedure to disputes less than USD 4 million;
• a new early determination mechanism;
• changes to the emergency arbitration provisions; and
• expanding requirements relating to the impartiality and independence of arbitrators and tribunal secretaries.

Aside from the Court of Appeal’s decision in CC/Devas v India (covered above), recent arbitration developments from the English courts include:

• Late amendments to challenges: In E v F, the Commercial Court refused a state's application to make substantial amendments to its challenge under ss67-68 of the Arbitration Act 1996 against an investment treaty award. The proposed amendments were introduced 162 days after the award – more than five times the 28-day statutory limit to bring a challenge. The Court held that the amendments should not be permitted, notwithstanding the absence of irremediable prejudice to the opposing party, given the overriding importance of finality in arbitration.
• Anti-suit injunctions:  In Chubb Insurance v Fertitta Entertainment, a business interruption insurance dispute arising from COVID-19 losses, the Commercial Court dismissed a jurisdiction challenge and granted a final anti-suit injunction restraining a party from pursuing US proceedings. The Court also awarded damages and other relief for breach of the arbitration agreement. Although the parties were Bermudan and US companies and the policies covered US risks and losses, the policies provided for London-seated arbitration and stipulated that English law govern the existence of the arbitration agreement and the selection of arbitrators. The Court held that, as the arbitration agreement was governed by English law, foreign law was irrelevant to any jurisdictional challenge and that a closer connection to another forum did not constitute a strong reason to refuse relief.

The Supreme Court has held in Saxon Woods v Costa that the requirement to act "in good faith" under section 172(1) of the Companies Act 2006 applies to a director's conduct as well as to their subjective belief about what is best for the company.  A director who genuinely believes a particular strategy would promote the company's success cannot pursue it through covert or disloyal means that subvert the board's collective decision-making.  

Mr Costa, the chairman of a company subject to a shareholders' agreement requiring an exit by end-2019, disagreed with the agreed timetable. He covertly pursued a slower sale strategy, concealing his actions from the board and misleading his fellow directors. The exit was delayed past 2019 and subsequently destroyed by the Covid pandemic. 

The Supreme Court unanimously dismissed Mr Costa's appeal, confirming the Court of Appeal's finding of breach of fiduciary duty and its unconditional buy-out order (see our July 2025 edition of Briefcase). Lord Briggs held that the duty of good faith under section 172 is rooted in the fiduciary duty of loyalty and cannot be reduced to a purely subjective test of the director's thought processes. Where a director covertly subverts a strategy resolved upon by the board, that conduct is manifestly disloyal and constitutes a breach of duty, regardless of the director's genuine belief.   

Since Evans v Barclays, there has been a rise in defendants seeking to have claims certified on an opt-in rather than an opt-out basis and, in some instances, asking the Competition Appeal Tribunal to reconsider previous rulings on certification. Since the May edition of Briefcase, the CAT has handed down rulings in Rodger v Alphabet and Ennis v Apple, refusing (in Ennis) to decertify the claim and (in Rodger) to vary the collective proceedings order. Notwithstanding these setbacks, we anticipate that defendants will continue to ask the CAT to revisit previous certification decisions, given the significant potential for reducing damages.

In other competition news, the CAT has approved a ‘drop-hands’ settlement in the dispute between the Consumers’ Association (Which?) and Qualcomm. Following trial in October 2025, it became clear that the claim had “no realistic” prospect of success.

Finally, the Supreme Court has granted the class representative in Roberts permission to appeal the judgment handed down by the Court of Appeal in March. It remains to be seen whether the Supreme Court will agree with the CAT and Court of Appeal that Professor Roberts’ abuse of dominance claims against six water companies are excluded by section 18(8) of the Water Industry Act 1991. Given that this is the first environmental collective action, the outcome will be watched closely.

In the May edition of Briefcase, we covered recent developments regarding privilege and AI. For a recap, see our blog.

AI continues to raise novel issues in disputes. In June, a freelance HR consultant used Garfield, an AI-powered law firm, to successfully sue a former client for £7,000 in unpaid fees. Garfield’s platform supported the case from pre-action through to trial prep, generating the letter before action, preparing and issuing the claim form, drafting witness statements and assisting with the directions questionnaire and trial bundles. This is the first victory of an AI-powered law firm before any court worldwide. Read more in our blog.

In June, the Court of Appeal considered a criminal case where a prosecution witness had used an AI tool to prepare for their cross-examination at trial. The Court reaffirmed longstanding principle in this new context: coaching witnesses on the substance of their evidence, by whatever means, including through the use of AI, is prohibited. Witnesses should be “firmly discouraged” from using AI to prepare for giving evidence. Although a criminal case, the principle applies equally in the civil courts. Read more in our blog.

In other AI news, the first claim arising from the Grok deep fake scandal has now been filed. Labour MP Jess Asato has filed a claim against xAI, seeking to hold it accountable for the fact that its chatbot, Grok, was able to create fake, sexualised images of her. This case raises important questions about data protection, misuse of private information, and the extent to which developers should implement safeguards.  To read more, click here.

As reported in February, the Civil Justice Council has been consulting on the use of AI in preparing court documents. In a recent update, the CJC noted consensus among legal professionals that no additional safeguards or disclosures are necessary for most documents, including pleadings and skeleton arguments. However, given divergent views on AI use in preparing witness statements, the Working Group will consider whether a “proportionate and workable approach” can be developed for witness statements. It will also look at introducing proportionate transparency for AI and expert evidence. Recommendations are anticipated later in 2026.

In July, the UK Jurisdiction Taskforce published its Legal Statement on Liability for AI Harms. The statement aims to reduce perceived uncertainty by addressing when and how English law is likely to impose liability for non-deliberate harm resulting from AI use. The statement concludes that, in most cases, liability will be determined by contractual principles or the law of negligence. While stressing that liability remains highly fact-specific, the statement works through detailed scenarios illustrating how the courts would likely approach issues such as causation, vicarious liability, defamation, professional negligence and more. Of particular interest is the repeated reminder that AI does not have legal personhood, and the detailed scenarios in which professional users (including lawyers and in-house counsel) may be held liable. Risk areas for lawyers include using AI where it should not have been used; failing to use it with sufficient care or following sufficient testing; and jeopardising privilege. The statement also notes that lawyers could be liable for failing to use AI where a competent member of the profession would have done so.

In Lloyds Developments v Accor Hotel Services, the High Court ordered two former directors to hand over their personal mobile phones to an independent reviewer so that WhatsApp, SMS and IMessages (including deleted items) could be searched for evidence in relation to a £180 million deceit claim. The Court acknowledged Article 8 privacy rights were involved but noted that these were not absolute. A balancing exercise was required, and protections could be put in place to minimise the risk of personal, confidential or legally privileged material finding its way into the hands of the claimant. This case serves as an important reminder that directors who use their personal devices for work purposes and become embroiled in litigation may be required to hand them over to an independent reviewer.  The fact that many of the messages had been deleted (so that the chances of recovering them were slim) made no difference to the Court’s decision.

The SRA has launched a consultation seeking views on the obligations that should be imposed on law firms that use or arrange litigation funding for high volume consumer claims (HVCC). This follows concern that many law firms using or arranging litigation funding for HVCC are failing to manage risk, conduct adequate due diligence on funders, and act in clients’ best interests – leading to the collapse of several law firms. To reduce the risk of recurrence, the SRA proposes introducing: new independence requirements; an obligation for law firms to provide a “prominent” funding information document setting out key details before consumers sign up; an obligation to notify the SRA when the firm use or arranges third party litigation funding;  obligations to conduct (and maintain) a third party funding risk assessment; as well as a requirement for law firms to prepare and keep under review a plan for how the law firm would manage any early closure/collapse. The deadline for responses is 17 September.

The SRA has expressed its views on litigation funding reform more broadly, noting that it would welcome compulsory regulation. It will continue to engage with stakeholders considering the CJC’s recommendations on litigation funding (covered in the July 2025 edition of Briefcase) to share its perspective. It will be interesting to see what reforms happen in the funding sphere, particularly given the recent change of Prime Minister.

In our July Contract Law Update we provide a round-up of recent developments in contract law. Our Update covers:

• Loss of bargain damages: The Supreme Court in Great Asia v Orion (The Lila Lisbon) considered whether loss of bargain damages for loss of profit could be recovered where a contract was terminated for non-repudiatory breach. The Court held that a contractual right to terminate does not necessarily entitle a party to loss of bargain damages. However, where an express compensation clause sets out recoverable losses in unqualified terms, it will be given effect — and there is no requirement for clear words to confer such a right where the party has in fact suffered the relevant loss. Parties should consider including express drafting on the damages recoverable upon termination.
• Warranties and representations: The High Court in Hoffman v Finalto held that statements in a management warranty deed amounted to representations, even though a warranty does not, without more, carry with it a representation. Relevant factors included that the statements provided information unlikely to be within the buyer's knowledge, the sequencing of execution (the statements were made prior to and induced entry into the SPA), and certain clauses in the deed and disclosure letter. The decision highlights the importance of including express non-reliance and no-representation statements to prevent claims in misrepresentation (save for fraud).
• Warranties and fraud: The High Court in Veranova v Johnson Matthey held that the knowledge of different individuals cannot be aggregated to fix a corporate entity with liability for fraud. Where a buyer's claim for breach of warranty was contractually limited to fraud, conscious dishonesty had to be shown on the part of at least one individual whose knowledge was attributed to the company. An innocent mind cannot be added to another to create a dishonest state of mind.
• Penalties: The Court of Appeal in Houssein v London Credit upheld the High Court's finding that a contractual default interest rate of 4% per month for an event of default (rising from 1% per month) was not a penalty. The judge identified the strong presumption that properly advised commercial parties of comparable bargaining power are the best judges of what is legitimate and went on to consider each event of default in turn, finding that the default rate was not extortionate by reference to the lender’s legitimate interest in the performance of the primary obligations that triggered it. The Court of Appeal noted that whether a clause amounts to a penalty is a value judgment, and a first-instance judge's evaluative judgment will be overturned only where there is an identifiable flaw.
• Interpretation: The Court of Appeal in Magic v The Greater Good Fresh Brewing Co held that a contractual right to "nominate" a director to the board was a right to appoint, not merely to propose a candidate for consideration. Although "nominate" could bear either meaning, the agreement made clear that the investor was entitled to nominate someone to the board, and a mere right to nominate with no corresponding duty to appoint would render the agreement redundant. The decision demonstrates the importance of both text and context in contractual interpretation and highlights the need for clear drafting to avoid the risk that different judges reach different conclusions on the same text.
• Causation: The Court of Appeal in Logix v Siam Aero held that the intervention of third-party fraudsters broke the chain of causation between a seller's breach of a confidentiality clause and the buyer's loss. While the chain of causation will not be broken where there is a contractual duty to prevent the very intervention that occurred, a general confidentiality obligation does not constitute such a duty. The decision illustrates that breach must be more than a mere opportunity or occasion for loss, and parties may consider express drafting to address specific risks (such as fraud or cyber) rather than relying on general confidentiality clauses.

Other recent developments in contract law include:

• Consumer claims: The Court of Appeal in Alesayi v Bank Audi SAL dismissed an appeal by a Lebanese bank, upholding a High Court ruling that its customer, a private individual, may pursue their US$24 million claim against the bank as a consumer claim in the English courts. The case turned on whether, for the purposes of the consumer jurisdiction gateway in the Civil Jurisdiction and Judgments Act 1982, the relevant banking contract was concluded in 1994, when the customer first opened their accounts, or in 2016, when they signed updated banking terms. The Court held that a contract will be treated as “newly concluded” where the changes are so significant in their legal effect that they create a new legal relationship between the parties, akin to a novation. On the facts, the Court found that the 2016 terms met that threshold, as they comprehensively restated and replaced the earlier arrangements.
• Sanctions provisions: The Court of Appeal in Tonzip v 2 Rivers provided important guidance on the interpretation of sanctions-related contractual protections, holding that a clause entitling a party to refuse instructions where compliance would “expose” it to sanctions risk sets a lower threshold than requiring proof of an actual sanctions breach. The dispute arose after a charterer instructed a vessel owner to load cargo from a Russian oil company linked to a sanctioned individual.  Although ownership of the company had purportedly been transferred following the sanctions designation, the vessel owner remained concerned about the possibility of ongoing control and refused to proceed. The Court held that it was sufficient for the vessel owner to form an objectively reasonable view that proceeding created a real sanctions risk, and confirmed that clauses framed by reference to sanctions “exposure” can be relied upon without proof that sanctions have in fact been breached. Read more in our June 2026 Global Investigations Bulletin.

The Supreme Court ruled on 27 July that a foreign judgment for a debt or definite sum of money gives rise to a legal obligation to pay the sum concerned and can form the basis for an English statutory demand (or winding-up petition), without the need for the judgment debtor to have the foreign judgment first recognised by the English court. The unanimous decision in Drelle v Servis-Terminal LLC [2026] UKSC 29 overturns last year’s Court of Appeal judgment and emphasises the importance of the “obligation principle” (often referred to in the authorities as the doctrine of obligation) and gives “debt” as that term is used in s.267, Insolvency Act 1986 a broad meaning.