Split trials, supplemental statements and the need for relief from sanctions

The judgment from the pre-trial review in the long-running Tesco Litigation (a securities class action) has illustrated the need for clarity as to the issues to be dealt with, and the evidence needed, in each stage of a split trial, as well as the need for relief from sanctions where a party seeks to serve supplemental statements after the deadline for exchange of witness evidence has passed: Manning & Napier Fund, Inc & Anor v Tesco Plc [2020] EWHC 2106 (Ch).

In this case, the claimants only belatedly appreciated that issues of reliance and causation relating to their lost profits claim were to be dealt with in the first trial in the action, and accordingly sought to serve supplemental witness statements addressing those issues long after the deadline for exchange of witness evidence had passed. As a result, the court said, the claimants had to satisfy the requirements for the grant of relief from sanctions, which the court described as "a considerable hurdle to surmount so late in the day".

The case serves as a reminder that, where a party seeks retrospective permission to file witness evidence out of time, the courts will apply the same rigorous approach as they do to an application for relief from sanctions – applying R (Hysaj) v Secretary of State for the Home Department [2015] 1 WLR 2472 (considered here) and the three-stage approach to application for relief from sanctions established in Denton v TH White Ltd [2014] 1 WLR 3926 (considered here).

In this case, the court considered the breach to be serious and significant, and while the error was "readily understandable" it did not amount to a good reason for the breach. Overall, and despite the court's reluctance to make an order which could deprive the claimants of the chance to obtain full recovery, the court held that the application for relief from sanctions should be refused (and therefore the supplemental evidence not admitted) unless the claimants provided sufficient disclosure in support of the claim by 14 August and the resulting extra work for Tesco in processing the disclosure was fairly and proportionately manageable, bearing in mind the need to prepare for trial.

For more information on the case, and in particular the implications of decisions relating to split trials in securities class actions, see this post on our Banking Litigation Notes blog.