2020 Year In Review - Civil Fraud

• Published date: 10 February 2021
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Civil Law
• Law Firm: Akin Gump Strauss Hauer & Feld LLP
• Author: Mr Kambiz Larizadeh, Jenny Arlington, Aimee Smart, Conor Mc Stravick, Mouna Moussaoui and Jay Jamooji

Introduction

Welcome to our 2020 round-up for civil fraud litigation, complex cross-border disputes and asset recovery. In this publication, we consider some of the key cases and developments in English law and practice from the past year that are of particular relevance to this field.

We summarise below a number of decisions grappling with a range of evolving and sometimes complex areas, including legally privileged communications, the standard of proof in civil fraud claims, exceptions to freezing injunctions, recovering cryptoassets, committal applications and jurisdiction battles.

1. Privileged but admissible: when can without prejudice communications become admissible?

Two notable cases in 2020 required the High Court to consider the limited circumstances in which without prejudice correspondence may nonetheless be admissible. Motorola v Hytera concerned a threat to remove assets from the jurisdiction allegedly in order to frustrate enforcement of a judgment, while Berkeley v Lancer involved an attempt to uphold a settlement agreement.

In this update, we set out the default position under English law as to without prejudice communications and the limited circumstances in which without prejudice communications may be admissible, before considering the recent judgments referred to above.

Status of without prejudice communications

The starting point under English law is that without prejudice communications cannot be referred to or relied on in ongoing litigation or arbitration. This is a fundamental principle of our legal system, designed to afford parties the opportunity to explore settlement frankly and without the concern that the content of their negotiations, including any concessions made during the course of such communications, will be deployed tactically against them later in the litigation should, for whatever reason, the settlement discussions fail.

There are a number of highly limited exceptions to this protection that have been carefully developed in English jurisprudence. For example, without prejudice material has been found to be admissible in the following circumstances (three of which were addressed in the cases examined below):¹

• as evidence of perjury, blackmail or other unambiguous impropriety (the "unambiguous impropriety exception");
• where justice demands (the "Muller exception");
• as evidence that a settlement agreement had been reached, to assist in a dispute over the interpretation of a settlement agreement;
• as evidence that a...