Society of Lloyd's v White [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Cresswell J |
| Judgment Date | 03 March 2000 |
| Judgment citation (vLex) | [2000] EWHC J0303-10 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | 2000 Folio No 176 |
| Date | 03 March 2000 |
[2000] EWHC J0303-10
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Sitting at:
Royal Courts of Justice
The Strand
London
The Honourable Mr. Justice Cresswell
2000 Folio No 176
MR M BRINDLE QC and MR D HOUSEMAN (instructed by Freshfields) appeared on behalf of The Society of Lloyd's.
( )
Anti-suit injunction �exclusive jurisdiction clause �relevant principles -
Lloyd's Litigation �proceedings in the Commercial Court and Australia.
Friday, 3rd March 2000
MR JUSTICE CRESSWELL: By application notice dated 11 February 2000 the claimant, the Society of Lloyd's ("Lloyd's"), seeks an interim anti-suit injunction against the defendants. The injunction sought is in these terms:
Each of the defendants, whether acting by himself/herself or by his/her legal or personal representatives or successors, be restrained until judgment is given by the Commercial Court in The Society of Lloyd's v. Sir William Jaffray, Consolidated Action 1996 folio number 2032, or until further order of the Court, from pursuing in the courts of any country other than England any claim against Lloyd's arising out of, or relating to, his/her former membership of Lloyd's and/or former underwriting of insurance business at Lloyd's.
In applying for this relief Lloyd's offer an undertaking not to take any limitation point in respect of the second to eighth defendants (which might otherwise be available) as a result of the grant of the injunction.
Lloyd's relies upon the following evidence in support of the application: the first witness statement of Mr Nicholas Demery, dated 10 February 2000; the second witness statement of Mr Demery, dated 11 February 2000, together with exhibits NPD1�4; the first witness statement of Mr Alan Mitchell, dated 11 February 2000, together with exhibit AJM1; the second witness statement of Mr Mitchell, dated 29 February 2000, together with exhibit AJM2.
Background
The background to the present application is described in Mr Demery's first witness statement at paragraphs 6 to 16. All eight defendants are counter claimants in the Jaffray proceedings.
The management of the Lloyd's Litigation has been the responsibility of the commercial Court. Prior to the market settlement in 1996, the Commercial Court identified and decided a number of preliminary issues which (subject to appeals) assisted in resolving certain common issues of principle. In addition, the Court selected and decided a number of lead or pilot cases for trial as to liability and general principles relating to quantum.
In September 1996 a market settlement was arrived at. About 95 per cent of Names accepted the market settlement. About 1752 Names did not accept. About 180 Names have since reached individual settlements with Lloyd's. Of the remaining Names as at 1 November 1999, about 148 were claimants in the Jaffray proceedings and about 1420 were not. A number of the remaining Names have joined the Jaffray proceedings since 1 November 1999. In the Jaffray proceedings, the Names allege that they were fraudulently induced to become and remain underwriting members of the Lloyd's market by reason of Lloyd's failure to disclose the nature and extent of the market's liabilities for asbestos-related claims. The trial in the Commercial Court of this issue, the Threshold Fraud Issue, in relation to three sample Names, started on Monday of this week, 28th February. All of the defendants in 2000 Folio No 176, except for Mr Stuart Beale, joined the Jaffray proceedings in or about July 1998, having been included in an affidavit sworn by Mr Freeman, a solicitor, on 17th July 1998 (made pursuant to paragraph 3 of the Order of Mr Justice Colman of 30th June 1998). Mr Stuart Beale joined the Jaffray proceedings by giving notice on 29 November 1999, pursuant to paragraph 8 of the Order dated 9th November 1999. All eight defendants are listed in the schedules to the Order dated 14 January 2000.
The Jaffray trial, which started last Monday, is the cumulation of many months' preparation, involving thousands of hours of work and considerable expense in legal costs. Mr Demery states in paragraphs 105 to 107 of his second witness statement:
"Location of Documents:
A very substantial discovery exercise has been carried out in England in relation to the Jaffray proceedings by lawyers acting for Lloyd's. I am informed by Freshfields that, since July 1998, Freshfields has conducted a broad review in respect of over 35,000 crates of documents for which there is no central index held by Lloyd's. Out of those 35,000 crates of documents, over 1,000 crates of documents were the subject of a more detailed review, from which over 250 crates of documents were subject of a document-by-document review. Lloyd's has served 22 discovery lists, containing over 60,000 documents. This very significant volume of Lloyd's documents is located in England. In comparison, Lloyd's has negligible documents in Australia and very few (if any) that would be relevant to the issues raised in the White proceedings. Mr White and the other defendants may have some discoverable documents in Australia but, in comparison to the volume of Lloyd's documents, the volume of these documents is likely to be minimal.
Location of Witnesses:
Lloyd's has also carried out a substantial exercise in interviewing and preparing witness statements for the Jaffray proceedings. � 47 witness statements and one reliance statement were initially served by Lloyd's by 17th January 2000 and � witness statements in reply � will include statements from additional witnesses. Of the Lloyd's witnesses a very small proportion only are normally resident outside the UK and none are resident in Australia. It is likely that Mr White and other defendants would want to call some, possibly many, of those giving evidence for the Names in the Jaffray proceedings. The Jaffray Names have served 22 witness statements and three reliance statements. Of the Names' witnesses, only one is believed to be normally resident outside the UK and none are resident in Australia.
Age and Health of Witnesses:
Difficulties have been encountered in preparation of Lloyd's witness statements. Many of the potential witnesses in the Jaffray proceedings (indeed many of those accused of fraud) are now of advanced years, some are not in the best of health, and some have died. During the course of preparing witness statements in the Jaffray proceedings one individual from whom a witness statement was taken has died, and I believe that two individuals have presented doctors' certificates certifying that they are too ill to attend trial (though there may be further doctors' certificates). The events that are concerned in the Jaffray proceedings (and the principal events concerned in the White proceedings) took place in the period 1978 to 1988. It is not clear to me how many of the witnesses that will give evidence at the Jaffray proceedings would be prepared to attend the trial in Australia of the same, or substantially similar, issues due to the pressures of such a trial and the age/poor health of some of those witnesses. The prospect of securing their attendance at trial in Australia seems to me to be remote with, of course, no means of compelling their attendance."
Notwithstanding their involvement in the Jaffray proceedings in England, each of the eight defendants has commenced legal proceedings against Lloyd's in Australia. Lloyd's say that such conduct is in clear breach of the exclusive jurisdiction clause contained in clause 2.2 of the General Undertaking signed by each of the defendants in 1986 or 1987.
I set out below the terms of clause 2 of the General Undertaking.
"2.1 The rights and obligations of the parties arising out of or relating to the Member's membership of, and/or underwriting of insurance business at Lloyd's and any other matter referred to in this Undertaking shall be governed by and construed in accordance with the laws of England.
2.2 Each party hereto irrevocably agrees that the courts of England shall have exclusive jurisdiction to settle any dispute and/or controversy of whatsoever nature arising out of or relating to the Member's membership of, and/or underwriting of insurance business at, Lloyd's and that accordingly any suit, action or proceeding (together in this Clause 2 referred to as "Proceedings") arising out of or relating to such matters shall be brought in such courts and, to this end, each party hereto irrevocably agrees to submit to the jurisdiction of the courts of England and irrevocably waives any objection which it may have now or hereafter to (a) any Proceedings being brought in any such court as is referred to in this Clause 2 and (b) any claim that any such Proceedings have been brought in an inconvenient forum and further irrevocably agrees that a judgment in any Proceedings brought in the English court shall be conclusive and binding upon each party and may be enforced in the courts of any other jurisdiction.
2.3 The choice of law and jurisdiction referred to in this Clause 2 shall continue in full force and effect in respect of any dispute and/or controversy of whatever nature arising out of or relating to any of the matters referred to in this Undertaking notwithstanding that the Member ceases, for any reason, to be a Member of, or to underwrite insurance business at, Lloyd's."
As to the eight defendants, Mr White served third party proceedings against Lloyd's in the Supreme Court of...
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