Roger Leggett & Ors v American International Group UK Limited [2025] EWHC 614 (Comm)

[2025] EWHC 614 (Comm)Case No LM-2023-000077IN THE HIGH COURT OF JUSTICEBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESKING'S BENCH DIVISIONLONDON CIRCUIT COMMERCIAL COURTVenue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 17/03/2025
Before
RECORDER JANET BIGNELL KCSitting as a Judge of the High Court
Between
ROGER LEGGETT & 40 OTHERSClaimantAMERICAN INTERNATIONAL GROUP UK LIMITEDDefendant
Mr Dale Timson (instructed by Orazio Grosso) for ClaimantsMr Carl Troman (instructed by Kennedys Law LLP) for DefendantJUDGMENT ON CONSEQUENTIAL MATTERS
Approved JudgmentThis judgment was handed down remotely at 10.30am on 17 March 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives
[1]My judgment on the preliminary issue in this Claim was handed down on 12 February 2025. This supplemental judgment relates to the terms of the Order I now intend to make.[2]At paragraphs 199-202 of my judgment I set out the process which I had asked the parties to undertake to attempt to agree an Order and the way in which matters developed subsequently. This included the fact I had granted a second extension of time to 31 January 2025 at 4pm for the Claimants’ Counsel to make written submissions. The Defendant’s Counsel circulated their submissions on 22 January 2025 together with the Defendant’s Draft Order.[3]At paragraph 199 of my judgment I recorded that no submissions had been received by the court on behalf of the Claimants and that no further request for an extension beyond 31 January 2025 at 4pm had been made. Indeed, the Claimants’ Counsel had written to the court on 31 January 2025 stating that he would not be making any submissions that day, although he anticipated the Claimants’ solicitors would write to the court. Following the deadline of 4pm on 31 January 2025 the court office had also received an email from the Defendant’s Counsel (copied to the Claimants’ Counsel), to the effect that it appeared the Claimants’ solicitor had not put forward any position before the extended deadline and noting the Claimant’s Counsel’s position. Nothing further was received by the court thereafter before I handed down my judgment.[4]When I proceeded to finalise my judgment and to make my Order dated 12 February 2025, I considered carefully the content of all the correspondence that the court had received from each of the Counsel at each stage following the circulation of my draft judgment. The Order I made was substantively in the terms of the draft submitted by the Defendant’s Counsel, Mr Troman. I considered the Defendant’s draft accurately reflected the findings I had made in my judgment. I considered the Defendant’s proposed treatment of the costs of the Preliminary Issue was appropriate and balanced in the Court’s discretion.[5]On 13 February 2025 it was brought to my attention that the Claimants’ solicitor and the Claimants’ Counsel had contacted the court on the afternoon of 12 February 2025 following the handing down of my judgment and Order. They had explained that the Claimants’ solicitor had in fact written to the court office by email on 31 January 2025 at about 3pm enclosing two additional bundles of further materials and two alternative draft Orders for the court’s consideration prior to the deadline that day.[6]The court office has no record of receipt of the Claimants’ solicitor’s email and materials on 31 January 2025 at 3pm or otherwise. Indeed, I gather there were difficulties with “bounce back” when the Claimants’ Counsel attempted to send a copy of the materials to the court office on 12 February 2025. There may, therefore, have been a similar problem on the afternoon of 31 January.[7]It is now apparent that the Claimants’ solicitor’s email to the court of 31 January was copied to the Claimants’ Counsel and two partners at the Defendant’s solicitors. The Claimants’ Counsel has confirmed that both he and the Defendant’s solicitors received it at about 3pm that day. It has also been confirmed by the Claimants’ Counsel that the Claimants’ solicitor did not receive any automatic failure of delivery receipt.[8]The Defendant’s Counsel had not been copied in to the email and was therefore also unaware of its existence at the time.[9]Once notified of this state of affairs, I set aside my Order of 12 February 2025 on 13 February 2025 of the court’s own volition. In all the circumstances, I determined that it was appropriate to proceed now on the basis the email had been received in time by the court. The Defendant has not objected to that course. If I had received the Claimants’ further correspondence and draft Orders at that time, I would have read the materials before considering my Order. I would also not have included the following two sentences in paragraph 199 of my judgment:
“Having ultimately extended time to 31 January 2025 at 4pm at the Claimants’ request, the Claimants failed to comply with that deadline. The Claimants did not seek any further extension of time.”
Those two sentences should, therefore, now be removed.[10]Given that the Claimants’ solicitor’s email attached 2 substantial bundles of materials, I gave directions running to 28 February 2025 at 4pm. Specifically, for the Defendant’s Counsel to provide any submissions in response to the materials and for both parties to inform the court thereafter if an oral hearing was now required.[11]I am grateful for Mr Troman’s further submissions dated 26 February 2025 in response to the Claimants’ solicitor’s Draft Orders. Mr Troman confirmed that the Defendant was content for me to deal with this matter on paper.[12]On 28 February 2025, the Claimants’ solicitor confirmed to the court that the Claimants were content for me to deal with the matter on paper unless I considered an oral hearing was necessary.[13]I have now had the opportunity to read the Claimants’ solicitor’s email of the afternoon of 31 January 2025, all of the attachments enclosed with the email, and the Claimants’ two alternative Draft Proposed Orders. The attachments substantively comprised copies of letters exchanged between the Claimants’ solicitor and the Defendant’s solicitors on 30 January 2025 and 31 January 2025, together with about 100 pages of other documents, including bank statements. Having reviewed that material carefully, I was satisfied that the terms of my Order could be resolved on paper.[14]The Claimants’ solicitors letters of 31 January 2025 and 30 January 2025 to the Defendant’s solicitors were largely in identical terms. However, the letter to the Defendant’s solicitor of 31 January 2025 stated in bold type at paragraph 1:
“I refer to my letter of yesterday dated 30th January 2025 and inform you that it is the Claimants’ position to inform you that it shall be considered substituted by the following terms. You are kindly requested to disregard the letter sent yesterday.”
Notwithstanding that instruction as between solicitors, I have proceeded to consider the full terms of the letter of 30 January as well given the Claimants’ solicitor’s decision to send it to the court.[15]The bundle also contains a letter dated 31 January 2025 from the Defendant’s solicitors to the Claimants’ solicitor in reply to the letter of 30 January 2025. The Defendant’s solicitors wrote that the content of the letter of 30 January was impermissible. They also expressed the view that it was “unclear whether the large number of enclosures attached .. have previously been disclosed or submitted to the Judge in argument”. They added that the Claimants had done “exactly what the Judge has told the parties not to do”.[16]Turning to the Claimants’ Draft Orders and the content of the Claimants’ solicitor’s letters of 30 and 31 January to the Defendant in support, the “Claimants’ Draft Order Primary Position” contains a proposed declaration that the Claimants are, subject to the outstanding issue of aggregation yet to be determined, entitled to a declaration on the preliminary issue that the Defendant is liable to satisfy the Order of Fordham J for damages, costs and interest as set out in the Schedule to the Order of Fordham J dated 26 March 2020. It contains a proposed order that the Defendant shall pay the Claimants’ costs in respect of the Preliminary Issue.[17]My judgment does not provide any basis for the Claimants’ Primary Position as set out in their Draft. With the exception of the treatment of the claims for loss and damage made by the 6 Claimants, the Claimants’ proposed Order runs counter to the findings in my judgment.[18]Amongst other matters, the first 8 pages of the letter of 31 January 2025 demonstrate that the Claimants’ Primary Draft Order is founded on a case regarding breaches by the LLP and “crucial facts” in respect of events beginning on 13 June 2008 and running to 19 January 2018 (see page 4). Much weight is attached at pages 4 to 8 to the findings made by the Italian Criminal Court of Appeal of Reggio Calabria in their judgment of 19 January 2018.[19]These matters did not form the basis of Fordham J’s relevant findings on causation in respect of the LLP and his Order against the LLP, as explained in my judgment. It is submissions about these kinds of matters that would seemingly have formed part of an alternative case that the Claimants’ Counsel invited me to give (unspecified) directions for the Claimants to plead following this trial in the event that the preliminary issue was determined against the Claimants.[20]Accordingly, it should have been plain to the Claimants that their proposed Draft Primary Order does not reflect the case that was presented to me at trial. Indeed, I note that the Claimants’ solicitor’s concluding invitation to the Defendant’s solicitors on page 8 of the letter was to “convene with the above that the LLP is liable for the damages awarded by Fordham J to all 35 Claimants” (my emphasis).[21]In the Claimants’ letter of 30 January 2025 it was further asserted at pages 8-27 that all the individual Claimants were entitled to an order for payment of their deposits on the basis of a failure by the LLP and Firm to provide a correct and accurate ledger showing the use of the funds in the Clients’ Account as required by the SRA. No mention of this was made in Fordham J’s judgment on causation, or to me by the Claimants at any stage during the hearing.[22]In Mr Troman’s submissions in respect of the Claimants’ Proposed Draft Orders, he summarises the content of the Claimants’ solicitor’s supporting letters as an abuse of process given the case presented at trial. As regards the content of the new arguments he submits: i) the Claimants had every opportunity to plead and prove in these proceedings and at trial that deposits were paid to the LLP and yet they failed to do so despite AIG’s extensive attempts to flush this out (as addressed in the judgment at paragraphs 178-188); ii) it does not make sense for the Claimants to suggest in the letter that some breach of an obligation on the part of the LLP to provide the Claimants with information caused the Claimants to lose their deposits. They were lost because the correct form of guarantee was not obtained as found by Foskett J in the related litigation and quoted at paragraph 34 of the judgment; iii) it is somewhat “astonishing” that it is suggested in the letter the LLP still holds the Claimants’ funds. If so, it is to be expected the Claimants could have recovered them in the LLP’s insolvency process; iv) this was an attempt by the Claimants’ solicitor to advance new allegations of breach of duty against the LLP never before pleaded, evidenced or argued whether before Fordham J or in the present proceedings. These matters “did not even feature in the list of new arguments in the Claimants’ opening submissions for trial” addressed in paragraphs 190-192 of the judgment; v) there is no evidence that the Claimants’ deposits were paid by the Firm to the LLP and the belated arguments in the letters of 30 January 2025 are of no evidential value. Some form of forensic accounting investigation would have been required if this argument had been raised previously and what the outcome of that might have been is wholly unclear.[23]In my judgment it should indeed have been apparent to the Claimants that each of its further arguments and materials, including materials which had not been pleaded, disclosed, or the subject of any submissions at trial, could not provide any foundation for the Claimants’ proposed Order in respect of my judgment on the preliminary issue as presented and argued before me.[24]Separately, I note that many of the payments listed in the first table in the letter of 30 January 2025 do not actually name the LLP, but rather “Giambrone Law International Law”. Furthermore, the Claimant’s solicitor’s letter states that the new banking information relied upon was only obtained by the Claimants for the first time on 25 January 2025. That was after the trial in this Claim had taken place and after my draft judgment had been circulated.[25]For the avoidance of any doubt, the entirety of this material (and the material set out in support of the Claimants’ Secondary Position), was not of a kind that fell within the scope of paragraph 198 of my judgment where I had asked Counsel to identify certain matters, if relevant. That related to the fact it was only in the Claimants’ Counsel’s opening submissions that the Claimants belatedly identified in this Claim, for the first time, that the damages awarded by Fordham J to the 6 Claimants were not awarded by him on the basis of any transfer of liability from the Firm, or indemnity in respect of the Firm’s breaches, when one considered the relevant dates to which Fordham J’s findings on causation fell to be applied in the cases of these 6 Claimants. As I informed the parties by email on 28 January 2025, these clarificatory matters should not have required extensive instructions or work. They simply dated back to the checks already undertaken for the trial before Fordham J on the figures claimed by the Claimants, being checks which Fordham J had asked Counsel there to undertake before his Order was drawn up. As I wrote then, no new additional work was required or envisaged. There was to be no re-opening of the case.[26]The “Claimants’ Draft Order Secondary Position” contains a proposed declaration that the Claimants are, subject to the outstanding issue of aggregation yet to be determined, entitled to a declaration that the Defendant is liable to satisfy the judgment for damages, costs and interest ordered by Fordham J in the amounts set out by the Claimants’ solicitor in sub-paragraphs a-v of the Draft Order Secondary Position. These specified sums are, in the main, stated to be the reservation fees paid by each one of the Claimants, Italian legal fees, interest and costs.[27]In addition to the cases of the 6 Claimants previously identified at trial and discussed in my judgment, 5 extra Claimants: Mr and Mrs Beagan, Mr and Mrs Mahoney and Mr Paul Smith, are also proposed to be awarded full recovery of the damages awarded by Fordham J in this draft. The Draft Order Secondary Position concludes with a proposed order that the Defendant shall pay the Claimants’ costs in respect of the Preliminary Issue.[28]It appears that the Draft Order Secondary Position is intended to be supported by pages 9 onwards of the letter of 31 January 2025. The pages contain a list of the individual Claimants starting at page 10. The letter lists: (1-2) Leggett reservation agreements, “paid by the 31/08/2007”, plus the dates of invoices in 2010; (3-4) Hayward reservation agreements, “paid by the 31/08/2007”, plus the dates of invoices / payments in October 2010, 21 January 2011, 16 December 2011, 2012, 2013 and 2014; (5-6) Rossi reservation agreement, “paid by 11/10/2007”, and invoices in April and December 2011 and December 2012; (7-8) Byrne and Magner reservation agreement, “paid by 07/3/2008”, and invoices on 21 January and 16 December 2011; (9-10) Niblett reservation agreement, paid by “31/08/2007”, no invoices listed; (14-15) Smith reservation agreement, “paid by 12/10/2007”, and invoices on 21 January 2011, 16 December 2011 and in 2012; (16-17) Fernandes reservation agreements, “paid by 06/03/2008”, and invoices / payments on 21 January 2011, 31 March 2011, 16 December 2011, in 2012, 2013 and 2014; (18-19) Bowker reservation agreement, “paid by 10/11/2007”, and an invoice on 14 February 2011; (20) Payne reservation agreement, “paid by 21/10/2007”, and invoices in 2010; (21-24) Donnelly reservation agreement, “paid by 27/06/2007”, and invoices on 29 March 2011, and in 2012, 2013 and 2014; (25-26) Connolly reservation agreement, “paid by 03/07/2007”, and an invoice / payment on 21 January 2011, 16 December 2011 and in 2012; (27) Lockwood reservation agreement, “paid by 26/07/2007”, no invoices listed; (28) Vickery reservation agreements, “paid by 20/07/2007” and invoices / payments in 2010; (29) Clarke reservation agreements, “paid by 27/06/2007”, and invoices 2012; (30-31) Mahoney reservation agreements, deposits paid by 18/06/2007 and 18/06/2007, and reliance placed on separate advice said to be given by the LLP from March to October 2012, with payment said to be made to the LLP following invoices in 2012; (33-34) Redmond reservation agreement, “paid by the 17/09/2007”, invoices 14 April and 16 December 2011; (35, 36-40) Beagan and Smith reservation agreements, and reliance place on separate advice said to be given by the LLP in March 2013, with payment said to be made to the LLP following invoices / payments listed as dated 7 January 2013, 30 March 2013 and 4 March 2013; (39) Tysom, reservation agreement, “paid by 03/07/2007”, invoice 21 January 2011; (4) O’Connor reservation agreement, “paid by 03/07/2007”, invoices 21 January and 16 December 2011.[29]As a starting point, the Claimants’ solicitor’s letter of 31 January 2025 does not set out any rationale for the proposed order against AIG in respect of the reservation fees paid by the Claimants as set out in this Draft Order. In fact, the only express reference to recovery of the reservation fees in the letter of 30 January 2025 was removed from the substituted letter of 31 January 2025. On 30 January 2025 it had been contended by the Claimants’ solicitor that:
“It is the position of the Claimants that, in further subordination, they should be entitled to recover the reservation fees on the basis that the LLP could have recovered them.”
No details of that case were advanced.[30]As set out in Fordham J’s judgment, and in my judgment, Fordham J’s findings on causation do not analyse the LLP’s own prospects of recovering the reservation fees paid by the Firm’s former clients once it had begun to act for the relevant Claimants after April 2008. As set out in paragraph 63 and 64 of Mr Troman’s opening submissions at trial (which were not challenged), there was no finding that reservation fees paid were not refunded as a result of a failing by the LLP to give advice.[31]On the basis that a separate order in respect of the reservation fees is still intended to be pursued by the Claimants following the substitute letter of 31 January 2025, my judgment does not provide any basis for their recovery by all the Claimants (only the 6 Claimants). No attempt was made to advance any specific case at trial in respect of the recovery of these reservation fees by all the Claimants, or the 5 further Claimants in line with the wholly new grounds now advanced in their specific cases. I should add here that the 5 further Claimants are not suggested to be in the same factual and legal category as the 6 Claimants in this regard.[32]In the case of the additional invoices listed (and placing the 6 Claimants on one side as I have done in my judgment), the Claimants are all individuals who originally instructed the Firm. Although the specific invoices listed were issued to the Claimants at dates after the LLP was incorporated, Fordham J’s judgment proceeds on the basis that the relevant damages set out in his Order were recoverable by the Claimants in respect of Italian legal costs on the basis of the reports on title provided to them by the Firm being inadequate. As a result, there is no basis upon which the LLP can have been independently liable for these losses unless it (not the Firm) produced the reports on title. No assertion is made that the clarificatory checks showed that it was the LLP which produced the reports to any Claimants other than the 6 Claimants already identified at trial.[33]Whilst this is simply an additional point and not the foundation of my ruling, I note that a number of the invoices listed in the Claimants’ solicitor’s letter are also dated very substantially after the LLP’s liquidation on 12 January 2011. In so far as the Claimants’ solicitor’s letter suggests that each one of the invoices listed was sent out by the LLP and/or in respect of the LLP’s own work (rather than work by any other Giambrone entity), some of the invoices (and the work to which they relate), post-date the LLP’s liquidation by up to 3 years. The Claimants’ solicitor uses the description “Giambrone”, rather than naming the LLP, in various places in the list. A number of the documents attached by way of new evidence also required payment to be made to “Studio Legale Giambrone”.[34]As regards the deposits paid by the 5 additional Claimants who are the subject of separate treatment in the Draft Order Secondary Position, the Claimants’ solicitor’s letter mentions that each was given further legal advice relating to the re-structuring of their existing agreements in 2012 and / or 2013 (i.e after the liquidation of the LLP). Fees were invoiced to them thereafter. The Claimants’ solicitor submits that the arrangements made at this stage demonstrate that the deposits paid by these Claimants prior to the incorporation of the LLP were under the control of the LLP, and the LLP should therefore compensate these Claimants in full for all the damages and losses awarded by Fordham J.[35]As already mentioned, none of these 5 Claimants were identified in the pleaded Claim or at trial as falling into any further special category. This new case in respect of the deposits was not the subject of any finding by Fordham J against the LLP. No submission was made to me to this effect at trial and none of this material was pleaded or produced or tested.[36]In all the circumstances, my judgment does not provide any basis for the Claimants’ Secondary Position as set out in this Draft and the Claimants’ letters. With the exception of the treatment of the claims for loss and damage made by the 6 Claimants, the Claimants’ proposed Order runs counter to my findings.[37]As I recorded in my judgment at paragraph 200, Mr Troman was correct to identify that there are no Claimants other than the 6 Claimants entitled to any separate Order. The comments set out in my post script at paragraphs 201 and 202 of my judgment also remain unaltered.[38]Given that the content of the Claimants’ solicitor’s email of 31 January 2025 does not reflect the conclusions reached in my judgment, I now re-make the Order in the terms in which it was made on 12 March 2025. The Defendant’s Draft Order of 22 January 2025, provided to the court and to the Claimants on receipt of my draft judgment: i) reflects paragraphs 82 to 91 and 197(i) of my judgment, where I stated the 6 Claimants were entitled to a declaration that they be indemnified in respect of the full judgments obtained against the LLP together with costs and interest awarded against the LLP, subject to the remaining issue of aggregation; and ii) reflects paragraphs 133 to 198 of my judgment and the dismissal of the other claims.[39]As to costs, I order that the Claimants who advanced claims which have been dismissed should pay the Defendant’s costs of the proceedings under CPR 44.2(2)(a). I consider those costs should follow the event in the ordinary way here.[40]As regards the 6 Claimants, I order that there should be no order as to the costs of the preliminary issue, subject to aggregation. Whilst these 6 Claimants succeeded on the preliminary issue, that was only as a result of their identification for the first time in the Claimants’ Counsel’s written opening, the subsequent production of the factual documents in support of their cases on the second day of the trial, and my decision to hear submissions about those documents and to add them to the trial bundles for a more detailed chronological review. That was notwithstanding the efforts made by the Defendant to obtain any information of this kind prior to trial when their claims should have been properly pleaded. Those efforts were as set out in my judgment at paragraphs 174 to 187. I note the Defendant’s submission that it could have sought to obtain its costs against these 6 Claimants, but agree with their conclusion that no order as to costs strikes a balance that is fair as they reflected in their draft.