“The court may strike out a statement of case if it appears to the court – (a) that the statement of case discloses no reasonable grounds for bringing or defending the claim; (b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or (c) that there has been a failure to comply with a rule, practice direction or court order.”
“The plaintiff says — and, of course, we accept — that he has no intention at all of canvassing anyone. If he has no intention of canvassing anyone, what can be the purpose of this originating summons? If he does not canvass, it does not matter very much whether or not the clause prohibits him from doing so. He says, however, that if he did canvass (which he does not intend to do), or if the defendants falsely accused him of canvassing (which they say they do not intend to do), he would be protected by the declaration which he seeks. A more academic question I find it difficult to imagine. It is certainly not the sort of question about which the court ought, in its discretion, to make any declaration” per Salmon LJ at 606C-D. But in addition to its inutility, Harman LJ, at 605E-F also referred to the claimant’s purpose, and to the court’s proper function: “The plaintiff wanted a declaration that he was entitled to canvass customers of the firm, with certain exceptions. That would have been a gross breach of professional etiquette on his part and I do not think in any event the court would give him a declaration that he was entitled to do something which is notoriously against the rules of the Institute of Chartered Accountants. That is not the sort of thing that the court will do. The result would only be either that he would be committing that breach and would be struck off, or he would not be committing it, in which case there would be no need for the declaration.”
“Such acts [of indiscipline or carelessness] are clearly breaches of contract and as such are wrongful and illegal acts, the gravity of which is increased by the fact that the country is at war. In effect, therefore, the applicant is asking the court to inform him how he would stand if he should do an unlawful act. If he intends to act lawfully, the question is merely academic. If he had it in mind to act illegally and wrongfully, it is no doubt convenient for him to know how severe the penalty is likely to be, or how easily he is likely to escape, but it seems strange that a court of law should be asked to expend time and trouble on providing him with this information. I think it right to express the doubt which I feel whether it would have been desirable or proper to grant a declaratory judgment in the present case.”
“I do not think it would be just – indeed, in my opinion, it would be utterly unjust - to grant a declaration, even if she had proved English domicile, which she has not. Perhaps I am back where I began, with the maxim which I can now express as “No woman can take advantage of her own wrong.”
“35. Based on the evidence I have seen it is impossible at this stage to dispel the concern that the March 2022 transaction was not genuine, but instead arranged to give the appearance that A1 is no longer under the control of sanctioned individuals. It is important to note that [the Sanctions Regulations] make provision for action to be unlawful, at least without a licence, where a person either knows or has reasonable cause to suspect that the person or individual concerned is sanctioned. 36. In this case, the buy-out was for 100,000 roubles, equivalent at the time to£714 . The purchaser, a Mr Fayn, has given evidence maintaining that this was a market price, relying on a negative balance sheet as at31 December 2021 , the deficit amounting to around£4.3 million as at the date of purchase. However, Mr Bedzhamov's advisers point out that the balance sheet relied on appears to omit substantial amounts including, but certainly not limited to, a large amount held in court as security in the VPB proceedings and$20 million which the US Attorney's Office has been told is owed by VPB to A1. It also appears to be at odds with financial statements filed with the Russian Federal Tax Service, valuing A1's assets at the end of 2021 at approximately£5.9 million . There is also a question as to how A1's ongoing activities are being funded.”
“A1 and Investment Company A1 are investment businesses of Alfa Group, a Russia based entity connected to U.S.-designated individuals Petr Olegovich Aven, Mikhail Maratovich Fridman, German Borosovich Khan, and Alexey Viktorovich Kuzmichev. A1 and Investment Company A1 were designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.”
“It is also not necessary to decide whether, even if the appellants were right that entry of a money judgment was prohibited by SAMLA and the Regulations, one or other of the alternatives (described by [Counsel for the Defendants/Appellants] as workarounds) such as a declaratory judgment or judgment on liability with quantum deferred until sanctions were lifted, would not be prohibited. However, I am firmly of the view that, if the appellants were correct that entry of a money judgment was prohibited, it would not be appropriate to grant a stay of the proceedings either now or at any stage up to and including the trial. Given that the principle of legality requires, as Lord Reed JSC said in UNISON at [80], that the relevant provision is interpreted as authorising only such intrusion as is reasonably necessary to fulfil the objective of the provision in question, I consider that [Counsel for the Respondents/Claimants] is correct that the court could enter either a declaratory judgment or judgment on liability with quantum deferred. Such a judgment would not be either making funds available to the designated person or dealing with either a fund or an economic resource.”
“The words “making funds available” might well be apt to describe an order enforcing a judgment, but not entering the judgment”
“The reason why the common law condemns champerty is because of the abuses to which it may give rise. The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence, or even to suborn witnesses. These fears may be exaggerated; but, be that so or not, the law for centuries has declared champerty to be unlawful, we cannot do otherwise than enforce the law ….”
“the law of maintenance depends upon the question of public policy, and public policy … is not a fixed and immutable matter. It is a conception which, if it has any sense at all, must be alterable by the passage of time.”
“Where the law expressly restricts the circumstances in which agreements in support of litigation are lawful, this provides a powerful indication of the limits of public policy in analogous situations. Where this is not the case, then we believe one must today look at the facts of the particular case and consider whether those facts suggest that the agreement in question might tempt the allegedly champertous maintainer for his personal gain to inflame the damages, to suppress evidence, to suborn witnesses or otherwise to undermine the ends of justice”
“It is well settled that the illegal maintenance of the plaintiff in an action is no defence to the action … I find difficulty in reconciling this with the theory that it affords proper ground for a stay of proceedings. It is not, to my mind, a satisfactory answer to this difficulty to say that the stay would be of a temporary character only, operating until such time as the proceedings are purged of the taint of illegality. Once there has been illegal maintenance, the crime by which the proceedings are said to be tainted has been irretrievably committed, and I do not see how the taint could be purged otherwise than by discontinuing these proceedings and starting a fresh action. That would, in effect, make maintenance a defence to the action, which it clearly is not.”
“A person who has funded an action champertously may fail to enforce recovery of the agreed proportion of the spoils. A person who has secured a champertous agreement to fund his litigation may be unable to enforce payment of the agreed funds. But the fact that a funding agreement may be against public policy and therefore unenforceable as between the parties to it is by itself no reason for regarding the proceedings to which it relates or their conduct as an abuse.”
“55. Chadwick L.J. considered the authorities at some length. He gave extended consideration to Martell v. Consett Iron, which was a decision before criminal and tortious liability for maintenance and champerty were abolished by theCriminal Law Act 1967 . This case emphasised the important distinction between the proceedings themselves, which may be genuine and viable, and the means by which and the purpose for which they are maintained. It was well settled that illegal maintenance of the plaintiff in an action is no defence to the action. There was the possibility of staying proceedings as an abuse, but each of the three judgments suggested that it might well not be just to do so in particular cases. Chadwick L.J. referred to Grovewood Holdings v. James Capel, where Lightman J. considered that it would be both logical and right in any ordinary case to stay proceedings which were maintained champertously as constituting an abuse of process. Lightman J. had noted that Martell v. Consett was concerned with maintenance where there is no aggravation. He had no doubt that he was free in the case of a champertous agreement such as that before him to grant a stay to prevent a continuing abuse of process. Chadwick L.J. recorded that Lightman J's approach had been considered by this court in Abraham v. Thompson. He cited a passage from the judgment of Potter L.J. in that case at 374A–D, and also this passage from the judgment of Millett L.J. at page 377G: “Before 1967 maintenance was not only contrary to public policy but also both tortious and criminal. Even so, it was not an abuse of the process of the court for a plaintiff without the means to pay his own costs let alone to meet those of the defendant to bring proceedings with financial assistance provided by a third party, and the court would not stay such proceedings on this ground (see Martell v. Consett Iron Co Ltd [1955] 1 All E.R. 481,[1955] Ch. 363 ). In that case Jenkins L.J. gave three reasons for this. First, it was well settled that the fact that an action was being illegally maintained was no defence to the action, and it was impossible to reconcile this with the proposition that it afforded a proper ground for a stay of the proceedings. Secondly, once there had been illegal maintenance the proceedings were irretrievably tainted; the taint could not be purged except by discontinuing the proceedings and bringing a fresh action. But this would effectively make maintenance a defence to the action, which it does not. Thirdly, it was undesirable that the question whether the action was being illegally maintained should be adjudicated upon in interlocutory proceedings in the action, for this procedure involved the trial of what was, at least theoretically, still a crime in the absence of the accused.”
“It was accepted by this Court in Abraham v. Thompson that, although the court retains the power to stay proceedings if satisfied that they constitute an abuse of process, the mere fact that the proceedings are being financed by a third party with no interest in the outcome — other than in relation to the prospects of repayment — is not of itself sufficient abuse to invoke the jurisdiction of the court. The court is entitled to protect its own procedures; see Roache v. News Group Newspapers The Times, November 23, 1992; but it should be careful not to use that power so as to deny access to justice to a party who has sought to fund his proceedings in a way which may itself become contrary to public policy, unless that which has been done can be seen to amount to an abuse of the court's own process.” 56. Chadwick L.J. considered what element of public policy was affronted by the funding arrangement in the case before the court. He referred to the well known passage from the speech of Lord Mustill in Giles v. Thompson [1994] 1 A.C. 142 at 161B. He said that the description of maintenance referred to in that passage was indistinguishable from that given by Jenkins L.J. in Martell v. Consett Iron. Chadwick L.J. then said: “That conduct, of itself, has not been regarded as an abuse of process. Does the offensive conduct become an abuse because there is some notion of a division of the spoils? In my view the court is required to consider in the light of the facts in each case whether its process is affected or threatened by the agreement for the division of spoils.” 57. Chadwick L.J. considered that there was no abuse of the process of the Court of Appeal if the appellant's ability to comply with an order for security for costs resulted from a funding agreement provided on terms that the funders would obtain a substantial premium on repayment of the loan. He considered that the court did not have any other interest in protecting its process from abuse which required it to prevent the appeal from continuing. He said that, although there might well be cases where the court could see that there is some feature — “some element of trafficking in litigation” — which must be regarded as abusive, that feature was not present in the case before the court. He also considered that the court should discourage satellite litigation of the kind before the court in that application. 58. Simon Brown L.J. agreed that the application for a stay should be dismissed. He said: “What distinguishes lending from maintenance on the one hand and, in turn, maintenance from champerty on the other, seems to me at the border lines to raise very difficult questions. Similarly, the point at which any particular funding agreement, even assuming it is technically champertous, could be said to constitute an abuse of process is itself very far from clear. Many factors are likely to be in play. Amongst them will be these: (1) the terms of the funding agreement between the litigant and his funder; (2) their relationship quite apart from that agreement; (3) whether or not (and if so how and in what circumstances) the litigant proposes to repay the funder; (4) the relationship between the fund provided, the sum (if any) to be repaid and the sum at issue in the action; (5) the precise purpose within the proceedings for which the fund was provided.”
“60. As Chadwick L.J. said in Faryab v. Smyth, the question whether the courts' process is affected or threatened by an agreement for the division of spoils is one to be considered in the light of the facts in each case. We reject Mr Glennie's submission that the court should formulate a more circumscribed test limited to a consideration of the structure and apparent purpose of the funding agreement and the kind of litigation to which it is directed. The considerations to which Simon Brown L.J. referred in Faryab v. Smyth may in a particular case be relevant and important but they are not exclusive nor necessarily determinative in the abstract. Unless the funding agreement is plainly and obviously champertous, it will usually not be necessary to decide that question for the reasons given by Chadwick L.J. and by Millett L.J. in Abraham v. Thompson. 61. Abuse of the court's process can take many forms and may include a combination of two or more strands of abuse which might not individually result in a stay. Trafficking in litigation is, by the very use of the word “trafficking”, something which is objectionable and may amount to or contribute to an abuse of the process. We think that it is undesirable to try to define in different words what would constitute trafficking in litigation. It seems to us to connote unjustified buying and selling of rights to litigation where the purchaser has no proper reason to be concerned with the litigation. “Wanton and officious intermeddling with the disputes of others in which they [the funders] have no interest and where that assistance is without justification or excuse” may be a form of trafficking in litigation. Lord Mustill's words, quoted by Simon Brown L.J. in the context of an application to stay, are powerfully descriptive of the kind of plain and obvious champerty of which Chadwick LJ considered Faryab v. Smyth itself not to be an example. A large mathematical disproportion between any pre-existing financial interest and the potential profit of funders may in particular cases contribute to a finding of abuse but is not bound to do so.”
“126. …. I consider that (largely if not wholly as a consequence of the refusal to disclose the terms of the funding agreement), on the facts before the court on this application, the matter of abuse of process cannot be satisfactorily disposed of. In circumstances where, by reason of its inferred non-compliance with the DBAR 2013, there is (to use the language of summary judgment) at least a realistic prospect of the defendant establishing that the agreement is not merely champertous but an abuse of process. 127. There is insufficient evidence before me and there neither has been, nor can there be, full argument on the point. It would be wrong in these circumstances to grant summary judgment.”
“It is authorised by the DIA to manage the proceedings on its behalf. Mr Tchernenko, a senior staff member at A1, has what is described as day-to-day conduct of the proceedings, liaising as necessary with the DIA and being "under their supervision". Effectively, therefore, A1 is acting as the agent of the DIA (and thus VPB) for the purposes of this litigation. In particular, VPB's legal advisers take instructions from Mr Tchernenko and (at least when PCB was involved) he was said to be their primary point of client contact. I infer that, at least on a day-to-day basis, A1 are running the litigation.” 121.6. that there is no reason to believe the situation is different in respect of its relationship with the Trustee, who (as Falk J said in[2023] EWHC 348 at [44]) is “able to do nothing without funding and (no doubt) approval from A1”; 121.7. that this Court has already made a series of findings as to irregular and/or improper litigation conduct of precisely the sort that the prohibition on champerty is intended to avoid; A1’s pattern of conduct is abusive. Various examples were provided, including A1 themselves conducting an aggressive advertising campaign against Mr Bedzhamov in London which even A1 described as “unprecedented” in their own press-release on the subject. In her judgment at[2020] EWHC 2114 at [72], Falk J explained that this campaign was “not normal behaviour in litigation, even where a freezing order is concerned. The DIA [VPB’s liquidator] cannot simply disassociate itself from this, bearing in mind that it appears to have effectively handed control of the litigation to A1.”