Benyatov v Credit Suisse Securities (Europe) Ltd [2020] EWHC 85 (QB)

“This was a standard “buy-side” mandate where we offered support to our Italian colleagues in their work for our client, Enel, primarily by way of on the ground advice. This included, for instance, regular updates on the latest developments in the thinking at the Ministry of Energy, advice on bidding strategy and weekly phone calls to discuss the competitive landscape. In large part due to our advice, Enel won the auction, and were close to completing the purchase at the end of 2006.”

“38. In November 2006 I had travelled to Bucharest for two reasons: first to discuss the Romgas and Romtelecom privatisation mandates, and second to help Ministry of Energy officials with their presentation to the new government on the privatisation of Petrom that had taken place a few years previously. “39. I was staying in the Hilton Hotel in Bucharest. In the early hours of 22 November 2006, I awoke to knocking at my hotel room door. I got out of bed, went to look through the spyhole in the door and was shocked to see masked men with machine guns on the other side of the door. I ran to the telephone and called the operator, who sent security up to my room. Hotel security confirmed that the individuals outside my door were secret police officers with a warrant for my arrest. I put on some clothes and opened the door. I was arrested and immediately led away from the hotel in handcuffs, without having any opportunity to contact my family, colleagues or the US Embassy. “40. I was detained in a jail in Bucharest for 56 days, over the Christmas and New year period, during which time I was placed in a cell with serious criminals; two were heroin dealers and another was a serial burglar. After that I was placed under ‘house arrest’ – forbidden from leaving the city of Bucharest – until August 2007.”

“We share your frustration at the process to date, your anxiety regarding the final outcome of the case, and your desire to exhaust every appropriate avenue that could enhance the chances of a positive outcome in the case. “The bank has examined a range of options to support a positive outcome, including the option you alluded to of having a prominent individual express our concerns regarding the irregularities and due process issues of the case, and the signals a decision to uphold the convictions would send regarding the business and judicial climate in Romania. “The bank has reached a settled view that this type of intervention is not appropriate in advance of a final verdict. There is significant risk that prior to the conclusion of the case, such an intervention could be misconstrued as attempting to influence the Romanian judicial process, with negative consequences for the case outcome and the reputation of the bank. The current Romanian political climate and government transition heightens this risk. Relevant diplomatic stakeholders have advised on the basis of recent events of a similar nature, that it would be unadvisable to pursue such an intervention. “However, we are exploring options for additional avenues Credit Suisse might pursue in the unfortunate event of a negative decision, such as a presidential pardon, an application to the European Court of Human Rights, and direct representations to appropriate individuals and authorities in Romania, the US, EU and elsewhere on your behalf. Following a verdict, such direct representations would not bear the same risks. “Please be assured that we will continue to provide support to you during these extraordinary circumstances.”

“This Defence is without prejudice to the Defendant’s contention that the Particulars of Claim, in whole or in part, are liable to be struck out as disclosing no reasonable grounds for bringing the claims therein and/or as an abuse of process, or alternatively to be dismissed as having no real prospect of success.”

“(3) The application notice or the evidence contained or referred to in it or served with it must - (a) identify concisely any point of law or provision in a document on which the applicant relies, and/or (b) state that it is made because the applicant believes that on the evidence the respondent has no real prospect of succeeding on the claim or issue or (as the case may be) of successfully defending the claim or issue to which the application relates, and in either case state that the applicant knows of no other reason why the disposal of the claim or issue should await trial.”

“(2) 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;” (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;”

“1.4 The following are examples of cases where the court may conclude that particulars of claim (whether contained in a claim form or filed separately) fall within rule 3.4(2)(a): (1) those which set out no facts indicating what the claim is about, for example “Money owed £5,000”, (2) those which are incoherent and make no sense, (3) those which contain a coherent set of facts but those facts, even if true, do not disclose any legally recognisable claim against the defendant. 1.5 A claim may fall within rule 3.4(2)(b) where it is vexatious, scurrilous or obviously ill-founded.”

“Although the term “abuse of the court’s process” is not defined in the rules or practice direction, it has been explained in another context as “using that process for a purpose or in a way significantly different from its ordinary and proper use”(Attorney General v Barker [2000] 1 F.L.R. 759, DC, per Lord Bingham of Cornhill, Lord Chief Justice).”

“5.3 (1) A party intending to make such an application [under CPR 3.4 or 24] should do so before or when filing his directions questionnaire.” and “Applications for orders under rule 3.4(2) 5.1 Attention is drawn to Part 23 (General Rules about Applications) and to Practice Direction 23A. The practice direction requires all applications to be made as soon as possible and before allocation if possible.”

“What then is the rule as regards delay and Order 14? It is said that the plaintiffs have delayed so much, and the case is so close to trial, that I should regard the application as an abuse of process. Now it is true that normally plaintiffs use Order 14 shortly after they commence proceedings, normally, but not always, before a defence is filed. But there is nothing in the rules precluding an application at a later stage in the proceedings. I do not see why delay, of itself, should be a relevant matter. If there is no “defence to the claim” or the defendant cannot show that there is an “issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim” then delay can make no difference. Of course in some circumstances delay in proceeding summarily, coupled with an adoption of the procedures for full trial, may well suggest a weakness in the plaintiff’s case or may even suggest some other reason for trial. But it would be that weakness or reason, not the delay itself, which led to refusal of the application. Moreover the plaintiff may well, having indicated an intention to go to full trial and then having incurred his own costs and caused the defendant to incur his in going down that route, have to suffer a penalty in costs if he brings his Order 14 application late. But otherwise I can see no objection to a late application for judgment under Order 14. Indeed, in some cases, and I think this is one, its use may be commendable as saving both the extra costs and time involved in a full trial. If these defendants truly have no defence it is worse than pointless for them to be present at the trial, which will be complex enough without them. The plaintiffs are right to clear the decks as far as possible before trial.”

“26.1 It has never been suggested by the Defendant that in relation to his work in Romania he acted otherwise than within the limit of his instructions and authority at all times. “26.2 He was paid his salary in accordance with Clause 3; and received bonuses until 2011 in accordance with Clause 4. “27. From about 2001 onwards, Mr. Benyatov was required by the Defendant to visit and carry out work in Romania pursuant to clauses 8 and 9 of the Contract. He was involved on behalf of the Defendant in providing advisory services and access to capital in respect of various substantial transactions in Romania, including in particular privatisations of Petrom and Distrigaz (which were state-owned energy companies). “28. From about 2005, Mr. Benyatov worked for the Defendant on the proposed privatisation of another Romanian state-owned company: S.C. Electrica Muntenia Sud SA. The Defendant was acting for the eventual purchaser, Enel SpA, an Italian Company. “29. Unknown to him at the time, during his work for the Defendant in Romania, Mr Benyatov was the subject of covert surveillance by Romanian security forces along with two other of the Defendant’s employees, various Romanian officials and other non-Romanian citizens. A criminal investigation was instigated against him and others in or about 21 November 2006.”

“19.1 To indemnify Mr Benyatov in respect of all losses, costs, expenses and claims he has suffered arising from or in consequence of performing his duties on its behalf. This obligation continues after the termination of the Contract in respect of the duties performed by Mr Benyatov as an employee and/or agent of the Defendant. “19.2 Not, without reasonable and proper cause, to act so as to destroy or seriously damage the trust and confidence between employer and employee; “19.3 To support Mr Benyatov in the performance of his duties; “19.4 To protect and safeguard Mr Benyatov from obvious risks to his safety and well-being arising as a consequence of the performance of his duties; “19.5 To take every step to assist and support Mr. Benyatov in ameliorating the effect of any sanction imposed on him as an individual in consequence of the performance of his duties under the Contract, save in circumstances (which do not apply here) where it was terminated for gross misconduct. “19.6 Alternatively, it was an implied term that the Defendant would not terminate the Contract so as to deprive Mr. Benyatov of the benefit of the terms in the preceding paragraph 19.5 The pleading refers to paragraph 19.4, but this is a clear error. . “19.7 To exercise any contractual discretion rationally, reasonably (i.e. not contrary to the Wednesbury standard) and/or giving due consideration to The original pleading says “in accordance with”

“55.1 Lost income as a result of being unable to work as a senior finance professional since the termination of his employment on 13 June 2015 to date. Mr Benyatov’s expected average earnings as a senior finance professional without having been convicted in Romania would have been on average US$3-5m, and higher if all had gone well. Using the figure of US$4m, his lost income for the two years since the end of his employment is approximately US$8m, or £6m; “55.2 Lost future income as a result of being unable to work as a senior finance professional in the future. Mr Benyatov’s future loss of earnings for the next 13 years (until Mr Benyatov is 65 years old) equates to approximately US$52m, or £39m at current exchange rates; “55.3 A failed property transaction in London in September 2015, whereby Mr Benyatov was unable to obtain mortgage finance to complete purchases of Plots 46 (a 3-bed penthouse at £1.55m) and 47 (2 bed at £0.9m) Amberley Waterfront, W9 2JY, because of his convictions. Mr Benyatov lost £145,000 of the deposits paid, and costs and expenses of approximately £80,000. Mr. Benyatov had plans to develop these properties into a single unit, which would have a present value of approximately £3.5m. Accordingly, Mr. Benyatov has lost the difference in value of the purchase price and the current value of what would have been the developed property, minus development costs of approximately £100,000, resulting in a total loss of approximately £950,000.”

“Duty to indemnify the employee “The relationship of employment imposes a duty on the employer to indemnify or reimburse the employee against all expenses, losses and liabilities incurred by the employee in the execution of his employer’s instructions or within the authority granted to him by the employer, or during the reasonable performance of his employment. Thus an employer who failed to insure his vehicle in respect of third party risks was obliged to indemnify his employee who drove the vehicle in the course of his employment and who was held liable to a third party injured by his negligent driving. Nor, it was held in Reid v Rush & Tompkins Group plc, is the employer under any implied obligation to advise an employee working overseas to arrange his own insurance cover against accidents. But there is no general duty to keep the employee insured against all third party risks or to indemnify the employee against liability for his or her own negligence. Ancient authority suggests that if the act or omission of the employee was manifestly unlawful, he or she is not entitled to such an indemnity; but he may still be entitled to an indemnity from his employer if the act was apparently lawful or he was ignorant of the facts which made it unlawful and could not be presumed to know that the particular transaction was unlawful.”

“An employer is under an implied duty to indemnify or to reimburse the employee, as the case may be, against all liabilities and losses and in respect of all expenses incurred by the employee either in consequence of obedience to his orders, or incurred by him in the execution of his authority, or in the reasonable performance of his duties of his employment. Notwithstanding the fact that an employee was acting in the course of his employment, he may lose his right of indemnity or reimbursement where the liabilities or expenses did not arise out of the nature of the transaction which he was employed to carry out, but were solely attributable to his own default or breach of duty, or where, by reason of his conduct, he has forfeited his right to receive any remuneration for his services. “If the employer requires the employee to perform an act which, unknown to the employee, is unlawful At this point, footnote 3 to the passage in Halsbury says: “It is an implied term of the contract of employment that the employer will not order the employee to do an unlawful act ….” , the employee is entitled to be indemnified by the employer against any damage suffered in consequence of its unlawful nature. At this point, footnote 4 to the passage in Halsbury says: “Gregory v Ford [1951] 1 All ER 121 (employer required employee to drive vehicle not covered by third party insurance; third party injured by employee’s negligence; implied term in contract of employment that employer would comply with statutory provisions as to motor vehicle insurance; employee entitled to recover from employer damages and costs which he was liable to pay to third party; employer not entitled to indemnity from employee). See also Coulson v News Group Newspapers Ltd [2012] EWCA Civ 1547; [2013] IRLR 116 (agreement following termination included clause guaranteeing indemnity for legal expenses properly incurred by employee as a result of his employment; there was nothing in the criminal nature of the judicial proceedings that did arise to have rendered it objectionable for such an indemnity to have been applied). ….” , Even where the transaction is prima facie unlawful, he is entitled to his indemnity if he was led to believe by the employer, and was justified in believing, that in the circumstances of the case the transaction was one in which he might lawfully engage ….”

“Reimbursement of Expenses and Indemnity from Liabilities Incurred in Course of Agency “7-057 Subject to the provisions of Article 63, every agent has a right against his principal to be reimbursed all expenses and to be indemnified against all losses and liabilities incurred by him in the execution of his authority: and where the agent is sued for money due to his principal, he has a right to set off the amount of any such expenses, losses or liabilities, unless the money due to the principal is held on trust. There is, it seems, no implied indemnity in respect of loss suffered by an agent from torts committed against him by third parties in the course of the agency. This sentence ends with footnote 356 which cites the decision of the New South Wales Court of Appeal in National Roads and Motorists’ Association v Whitlam [2007] NSWCA 81 as authority. “Comment “7-058 The rule here given is normally stated in such general terms, but its juristic basis may require attention. In the nineteenth century, actions at law were based on the common count for money paid, and it was not often necessary to distinguish between contractual and what would now be called restitutionary claims. At the present day it could matter how the claim was classified in a particular case. “Contract “7-059 Where the agency agreement is contractual, the agreement to reimburse and indemnify in return for what had been requested, if not express, can be regarded as an implied term of the contract that operates unless clearly excluded. There is thus no difficulty in such cases in holding that the principal is liable to reimburse and indemnify the agent for all payments made and liabilities incurred within the agent’s express or implied authority. This would include not only payments that the principal is legally bound to make, but also payments which the agent is legally bound to make though the principal would not be liable for them, cases where the agent is bound by the usage of a market, cases where the agent makes an authorised but gratuitous payment on the principal’s behalf, cases where the agent makes a payment which could not have been enforced but which there is a strong and legitimate pressure to make, cases where the agent, though under a liability, has as yet not had to meet it, and cases where a payment is reasonably but mistakenly made by the agent. Cases where the agent acts beyond his instructions, or interferes without request, would not however be included.”

“The position is, accordingly, that although the duty of a master to his servant may extend to warning him of unavoidable risks of physical injury, it has not hitherto been extended to the taking of reasonable care to protect the servant from economic loss. Apart from Deyong v Shenburn [1946] K.B. 227 and Edwards v West Herts Group Hospital Management Committee [1957] 1 W.L.R. 415, which were mentioned in argument, we were not referred to any case in which the court has considered and rejected any such claim and no doubt the reason for that is not only the limitation of the duty, as stated, to personal safety but also the fact that it must be rare for any matter of economic loss to have been arguably caused by a breach of duty of the master without it being a breach of contract. If a servant is to have a claim in tort against his employer in respect of economic loss it must be based upon some special factor in the circumstances or in the relationship between them which justifies the extension of the scope of the duty to cover such a claim or upon a separate principle of the law of tort which imposes such a duty.”

“I have had much difficulty in concluding that the general duty at common law upon a master to take care for the protection of his servant’s physical well being cannot be extended by decision of the courts to include protection for the financial well being of his servant in special circumstances where the foreseeable financial loss arises from foreseeable physical injury suffered in the course of the employment and the duty would extend only to a warning of a special risk. If this view be right the only way in which an employer’s general duty of care – and I emphasise that I am referring only to the general duty of care which arises out of the relationship – will be capable of extension to cover financial loss will be by legislation, or by a contractual term, express or implied on the particular facts, or by a term which the court is able to say must be implied by law.”

“….it is not necessary to decide whether …the plaintiff would have demonstrated an arguable case for showing that it would be just and reasonable to impose the new duty necessary for the plaintiff’s case. There are, I think, substantial difficulties when consideration is given to the current legislation to which I have already referred. In a number of contexts Parliament has legislated to protect people from the risks of uncompensated injury. Compulsory employer’s liability insurance has been imposed. Save for certain limited exceptions that duty does not extend to employment out of this country. Even in the limited and modest terms of a duty to warn it might be difficult to impose by judicial decision a duty on employers in respect of their servants working abroad, which relates to loss through injuries suffered where the employer is not responsible, having regard to the fact that Parliament has not imposed an obligation to insure even in respect of injuries for which the employer would be liable.”

“… The classic formulation of the duty owed by an employer to an employee is focused on protection of the employee from physical injury, not protection from economic harm (albeit if there is physical injury then damages may be recovered for consequential loss of earnings), and this is true in both contract and in tort … Having regard to the general policy reasons which inform the analysis of whether a standard term or duty of care should be implied into a contract of employment, in my view the proposed term or duty to hold the employee harmless from economic loss should not be taken to be implied.”

“Where the nexus between parties is founded in a contractual relationship, as here, it is the contract which they have made with each other which is the primary source and reference point for the rights they have and the obligations they owe each other. Although a duty of care in tort may run in parallel with the contractual duty and have the same content, it is difficult to see how the law of tort could impose obligations in this area which are more extensive than those given by interpretation of the contract which the parties have made for themselves. The usual rule is that freedom of contract is paramount, and if the parties have agreed terms to govern their relationship which do not involve the assumption of responsibility for some particular risk, the general law of tort will not operate to impose on the employer an obligation which is more extensive than that which they agreed.”

“It is a general principle of law that when an act is done by one person at the request of another which act is not in itself manifestly tortious to the knowledge of the person doing it, and such act turns out to be injurious to the right of a third party, the person doing it is entitled to an indemnity from him who requested that it should be done.”

“As so expressed, that principle does not assist Mr Whitlam. What he did at the expense of NRMA, relevantly for present purposes, was to give the interview. His giving the interview did not turn out to be injurious to the rights of a third party – rather, as the interview was used, it turned out to be injurious to his own interests.”

“[Famatina] concerned an employee who was engaged to make a report for the company that engaged him. When that report was presented, and orally elaborated on to the board, a company director who was unfavourably commented on in the report sued the employee for libel and slander. That action did not succeed, but the employee incurred costs in defending it. He was held entitled to recover those costs from the company, upon the basis, expressed by Lord Cozens-Hardy MR at 292, that. “an agent had a right against his principal, founded upon an implied contract, to be indemnified against losses and liabilities, and to be reimbursed all expenses incurred by him in the execution of his authority.” “That case is, it seems to me, merely an example of the principle stated in Sheffield Corporation v Barclay.” 127.Finally, I should refer to paragraphs [93] and [94]: “93. Mr Gleeson submits that, while the case law so far has all been concerned with a situation where an indemnity applies to a legal liability incurred to a third person, or to an action taken in the actual performance of an office, there are “no reasons to think that the operation of the general principle should be limited to that narrow class of loss”. “94. In my view, there are good reasons of principle why the right of indemnity does not extend as far as Mr Gleeson submits it should. If the general principle stated by Bowstead & Reynolds were applied so that “losses” included losses of types that can be compensable by action in tort at the suit of the person who suffered the loss, the civil law would be very different to what it in fact is. If, for instance, “losses” included the type of damage that is remediable by an action seeking damages for personal injury, the mere fact that A had requested B to do a task, and B was injured in the course of performing it, would mean that B was entitled to be indemnified by A for the injury he had suffered. Any such entitlement would sweep aside those aspects of the law of tort that require there to have been a recognised tort committed by A before B is entitled to be compensated by A for his injury. It would mean that, in the paradigm case in which worker’s compensation payments are made, where a worker in the course of carrying on his duties is injured, the worker would have had a right of indemnity under the general law from his employer just because the employer had requested him to do the task in the course of which he was injured, quite independently of any obligation created by the worker’s compensation legislation, and the indemnity would be to provide a full indemnity, not merely the limited scale of benefits conferred by workers’ compensation legislation. I do not believe that a general principle of law that alters the civil law in such radical ways, exists but has hitherto gone unrecognised.” “an agent had a right against his principal, founded upon an implied contract, to be indemnified against losses and liabilities, and to be reimbursed all expenses incurred by him in the execution of his authority.”

“The Defendant, who had induced the Plaintiff to make this sale by his false representation and request to sell, and who, after the sale, continued to assert his right to sell, and confirmed the agency of the Plaintiff by accepting from him the residue of the proceeds of the sale, had no right to dispose of this property. The consequence has been, that the Plaintiff, supposing, from the Defendant’s false representations, he had an authority which he had not, and, acting as the Defendant’s agent, has rendered himself liable to an action at the suit of the true owner of the goods, and has been obliged to pay damages and costs, whilst the Defendant, the sole cause of the sale, quietly keeps the fruits of it in his pocket. “It has been stated at the bar that this case is to be governed by the principles that regulate all laws of principal and agent: Agreed: every man who employs another to do an act which the employer appears to have a right to authorise him to do undertakes to indemnify him for all acts which would be lawful if the employer had the authority he pretends to have. A contrary doctrine would create great alarm.”

“In order to entitle an agent to recover from his principal … he must show, first, that the loss arose from the fact of his agency; secondly, that he was acting within the scope of his authority; and thirdly, that the fault was not attributable to any fault or laches on his part. If the Appellant can establish these facts, it is plain that he is entitled to recover ….”

“the causing these men to be censured and chastised for their insubordination was part of the bounden duty of the master. Having fulfilled this duty, out of the performance of it comes manufactured a false charge. I differ entirely from the argument of Mr. Brett, that this is a remote and not a direct cause. The very cause which originated the charge against the master was the performance of his own duty in correcting these very men for their misconduct, and the false charge emanated instantly from it, and there were no intervening circumstances whatsoever which would cause it to be considered remote.”

“Last of all it is said this is a liability as distinguished from an actual payment, and that the agent or person entitled to be indemnified has no remedy. Whatever may be the case at law (as to which I say nothing, because it is not necessary) it is quite plain that in this Court any one having a right to be indemnified has a right to have a sufficient sum set apart for that indemnity.”

“The further question then arises whether there is, as contended by counsel for Mr. O’Driscoll, a common law principle under which a servant is entitled to be indemnified by his employer for any loss occasioned to him in the performance of anything which it may be his duty to do. The law as stated in Macdonell on Master and Servant, 2nd ed. p. 144, is this: “A master is bound to indemnify his servant for all expenses incurred or loss sustained in obeying his lawful orders,”

“In the present case it is in my opinion quite impossible to say that Mr. O’Driscoll was defending an action on behalf of his principals; he was defending, and it turned out successfully defending, an action on his own behalf which originated out of reports made by him in the execution of a duty which he owed to his employers but not in direct obedience to their orders; and I cannot find that any case has gone the length of deciding that a servant is entitled to be indemnified by his master against expenses of that character.”

“LORD COZENS-HARDY M.R. said that Mr. O’Driscoll was much more than a servant of the company and the duties imposed upon him were far wider than those of a consulting engineer. He was undoubtedly appointed to be the agent of the company for many purposes and all he had done was done in pursuance of his duties as agent. Therefore he came within the well settled rule that an agent had a right against his principal, founded upon an implied contract, to be indemnified against all losses and liabilities, and to be reimbursed all expenses incurred by him in the execution of his authority.”

“Famatina is actually an extension to the formulation of the indemnity set out earlier by Campbell JA in his judgment in Whitlam (derived from Sheffield Corporation v Barclay), in that the actions of the claimant (as agent of Famatina) were not in fact injurious to the third party (the managing director). So the indemnity covers situations where the third-party interaction does not result in injury to the third party, but only loss to the person entitled to be indemnified.”

“It has always been an implied term that the master will indemnify the servant from liability arising out of an unlawful enterprise upon which he has been required to embark without knowing that it was unlawful.”

“19.2.1 that it would not conduct business in Romania in a way that risked being determined as unlawful (i.e. contrary to Romanian law); “19.2.2 not to require him to embark on any such unlawful enterprise or potentially unlawful enterprise; “19.2.3 that it would not conduct a business that placed him (and/or any other employee) at risk of criminal conviction in consequence of faithfully, diligently or properly carrying out his (or their) duties; and/or “19.2.4 not to expose him to criminal conviction in consequence of faithfully, diligently or properly performing his duties for the Defendant.”

“19.3 To support Mr Benyatov in the performance of his duties; “19.4 To protect and safeguard Mr Benyatov from obvious risks to his safety and well-being arising as a consequence of the performance of his duties; “19.5 To take every step to assist and support Mr. Benyatov in ameliorating the effect of any sanction imposed on him as an individual in consequence of the performance of his duties under the Contract, save in circumstances (which do not apply here) where it was terminated for gross misconduct. “19.6 Alternatively, it was an implied term that the Defendant would not terminate the Contract so as to deprive Mr. Benyatov of the benefit of the terms in the preceding paragraph 19.5.”

“19.7. To exercise any contractual discretion rationally, reasonably (i.e. not contrary to the Wednesbury standard) and/or giving due consideration to The original pleading says “in accordance with”

“15.5.1 It is admitted that, in principle, if the Defendant was required by the terms of the Claimant’s contract of employment to exercise a discretion, it was an implied term that the Defendant would not do so capriciously, irrationally or perversely; “15.5.2 No admission is made as to the relevance of this implied term, however, given that there was no relevant term of the Claimant’s contract in relation to the matters complained of; and “15.5.3 It is denied that it was an implied term that the Defendant would exercise any contractual discretion in accordance with the Claimant’s legitimate expectations. As a matter of law, any legitimate expectations on the part of the Claimant (as to which no admission is made) are no more than relevant factors in the exercise of any contractual discretion, alongside, inter alia, the Defendant’s own interests and any other relevant matters.”

“50. Further or in the further alternative, and in the circumstances of this case, the appointment of a prominent individual as set forth above and the cost of the same is within the scope of the implied obligation at paragraph 19.1 above and/or is and would have been the proper application of any discretion in respect thereof on the principles set out in paragraph 19.7 above. Accordingly, the failure to appoint and pay for the appointment of such an individual is a breach of the said implied obligation by the Defendant.”

“52.1 The decision of the Defendant in or about 1 December 2014 to do nothing further at that stage to help Mr Benyatov; “52.2 The decision or decisions of the Defendant in Q2 2016.”

“23.1 Would engage a prominent individual to express the Defendant’s concerns regarding the irregularities and due process issues of the criminal case in Romania against Mr. Benyatov directly to the Romanian authorities after a final verdict; “23.2 Would explore options for additional avenues that might be pursued in the unfortunate event of a negative decision in the criminal case in Romania against Mr. Benyatov, such as having the prosecution and/or conviction withdrawn or otherwise nullified, an application to the European Court of Human Rights, and direct representations to appropriate individuals and authorities in Romania, the USA, EU and elsewhere on his behalf; “23.3 Would exhaust every appropriate avenue that could enhance the chances of a positive outcome for Mr. Benyatov in relation to the Romanian criminal case against him; “23.4 Would continue to provide support to Mr Benyatov during these extraordinary circumstances.”

“24.1 Michael Philipp (then CEO of Europe) gave the oral assurances when he visited Mr Benyatov in Romania in 2006. He also made clear that the Defendant took Mr Benyatov’s situation very seriously. In addition, he assured Mr Benyatov that his job was safe. “24.2 Fawzi Kyriakos-Saad (who replaced Mr Philipp as CEO of Europe) also visited Mr Benyatov in Romania. On a number of occasions he gave assurances that the Defendant would do everything it could to help him. “24.3 Marco Mazzucchellli (Head of Investment Banking Europe, and Mr Benyatov’s direct manager) met with Mr Benyatov when he returned from Romania and assured him that the Defendant understood the gravity of the situation and that Mr Benyatov could count on the Defendant’s full support. “24.4 Marc Granetz (co-head of Investment Banking) visited Mr Benyatov in Romania and also met him after he had left Romania in or around early 2008, and offered him assurances of the Defendant’s support.”

“The relationship between the plaintiff and the defendants could hardly be closer. Subject to what I have to say hereafter, it also appears to be uncontroversial that if an employer, or former employer, by his failure to make proper inquiries, causes loss to an employee, it is fair just and reasonable that he should be under an obligation to compensate that employee for the consequences. This is the position if an employer injures his employee physically by failing to exercise reasonable care for his safety and I find it impossible to justify taking a different view where an employer, by giving an inaccurate reference about his employee, deprives an employee, possibly for a considerable period, of the means of earning his livelihood. The consequences of the employer’s carelessness can be as great in the long term as causing the employee a serious injury.”

“in addition to foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’ and that the situation should be one in which the court considers it fair, just and reasonable that the court should impose a duty of a given scope upon the one party for the benefit of the other.”

“These stark differences between the interests of employer and employee strongly suggest that it would not be fair, just or reasonable to impose on an employer a duty of care to defend legal proceedings so as to protect the economic or reputational interests of his employee.”

“An amendment is sought pursuant to CPR 17.1(2)(a) and/or (b). In addition to the responsive amendments prefigured in VB1 §9 [2/22/201], the reasons for the amendments are in addition to the responsive points referred to at §9 VB1 are: “78.1 Correcting the typos and wrong cross-references as highlighted by the Defendant in their RFIs; “78.2 Seeking to address Master Davison’s point that a lack of particularisation informed his decision not to allow expert evidence in relation to the Defendant’s conduct after the arrest of the Claimant; “78.3 Clarification and particularisation of the existing claims, including in the light of expert evidence currently under preparation (as ordered by Master Davison). “79. As to the latter points, the Claimant notes that exchange of expert reports was due on 13 March 2020. It is therefore, unhelpful to have to make amendments before that evidence is closer to finalisation. The Claimant would have preferred to do so in an orderly fashion once that was done. Nevertheless, in response to the Defendant’s application, that process has been accelerated at the risk of detriment to the Claimant in order that the Court at this hearing has a fuller appreciation of the impact that such evidence is likely to have on the contours of this litigation and in particular as to the existence and scope of the implied duties and indemnity and in relation to causation.”

“(i) it would only be in an exceptional case (if ever) that a court would order security for costs if the order would stifle a claim; … (ii) in any event (a) an order should not ordinarily be made unless the party concerned can be shown to be regularly flouting proper court procedures or otherwise be demonstrating a want of good faith; good faith being understood to consist … of a will to litigate a genuine claim … as economically and expeditiously as reasonably possible in accordance with the overriding objective; and (b) an order will not be appropriate in every case where a party has a weak case. The weakness of a party’s case will ordinarily be relevant only where he has no real prospect of succeeding.”

“51. Having regard to the guidance provided by these authorities, the position may be summarised as follows: “(1) For jurisdiction under CPR r 25.13(2)(a) to be established it is necessary to satisfy two conditions, namely that the claimant is resident (i) out of the jurisdiction and (ii) in a nonConvention state. “(2) Once these jurisdictional conditions are satisfied the court has a discretion to make an order for security for costs under CPR r 25.13(1) if “it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order”. “(3) In order for the court to be so satisfied the court has to ensure that its discretion is being exercised in a nondiscriminatory manner for the purposes of articles 6 and 14 of the Convention: see the Bestfort case [2017] CP Rep 9, paras 50-51. “(4) This requires “objectively justified grounds relating to obstacles to or the burden of enforcement in the context of the particular foreign claimant or country concerned”: see Nasser’s case [2002] 1 WLR 1868, para 61 and the Bestfort case at para 51. “(5) Such grounds exist where there is a real risk of “substantial obstacles to enforcement” or of an additional burden in terms of cost or delay: see the Bestfort case at para 77. “(6) The order for security should generally be tailored to cater for the relevant risk: see Nasser’s case at para 64. “(7) Where the risk is of non-enforcement, security should usually be ordered by reference to the costs of the proceedings: see, for example, the orders in De Beer’s case [2003] 1 WLR 38 and the Bestfort case. “(8) Where the risk is limited to additional costs or delay, security should usually be ordered by reference to that extra burden of enforcement: see for example, the order in Nasser’s case. “52. I would add the following observations: “(1) The relevant risks are of (i) non-enforcement and/or (ii) additional burdens of enforcement. A real risk of either will suffice to meet the “threshold” test. “(2) Some of the authorities refer to difficulties of enforcement. Mere difficulty of enforcement in itself is not enough (save in so far as it results in additional costs and therefore an extra burden of enforcement). The relevant risk is non-enforcement, not difficulty in enforcement and this is the risk to which the test of “substantial obstacles” is directed. The obstacles need to be sufficiently substantial to amount to a real risk of non-enforcement. Difficulties may, however, be evidence of the “substantial obstacles” required for there to be a real risk of non-enforcement. “(3) Delay is mentioned as a relevant additional burden of enforcement, but it is difficult to see how this can be quantified in terms of security unless it is likely to result in some additional cost or interest burden.”

“61. Returning to rules 25.15(1) and 25.13(1) and (2)(a) and (b), if the discretion to order security is to be exercised it should therefore be on objectively justified grounds relating to obstacles to or the burden of enforcement in the context of the particular foreign claimant or country concerned. The former principle was that, once the power to order security arose because of foreign residence, impecuniosity became one along with other material factors: see the Thune case [1990] 1 WLR 562 cited above. This principle cannot, in my judgment, survive in an era which no longer permits discrimination on grounds of national origin. Insolvent or impecunious companies present a different situation, since the power under CPR 3 25.13(2)(c) applies to companies wherever incorporated and resident and is not discriminatory.” 284. And “67. The risk against which the present defendants are entitled to protection is thus not that the claimant will not have the assets to pay the costs, and not that the law of her state of residence will not recognise and enforce any judgment against her for costs. It is that the steps taken to enforce any such judgment in the United States will involve an extra burden in terms of costs and delay, compared with any equivalent steps that could be taken here or in any other Brussels/Lugano state. Any order for security for costs in this case should be tailored in amount to reflect the nature and size of the risk against which it is designed to protect.”

“11.1 approximately $1m in an account in the United States with Fidelity. This account is what is known as a “401k” account, which is a US private pension account (similar to what in the UK would be known as a Self Invested Personal Pension or SIPP). As this is a pension account, removing funds from it – for example to deposit with the court as security for the Defendant’s costs – would incur punitive tax penalties which would significantly reduce the amount available. While I am not an accountant, I understand that, were I to remove funds from this account, I would have to pay approximately 40-50% of the total sums removed in tax; “11.2 two houses, owned jointly by my wife and I …. These houses are the real estate development I referred to at paragraph 97 of my First Statement. I purchased the land in May 2016, and, together with a mortgage for $1.03m, used my liquid assets to pay for the costs of building the houses, with construction beginning in early 2018. Whilst these houses were being built, I lived in rented accommodation in Los Angeles. Since completion, to save on rent, and as my family has now joined me in Los Angeles, I have moved into one of the houses. The other was marketed for sale, and I have recently accepted an offer of $1.935m in relation to it (given that the two houses are similar I believe that the value of the house that I live in with my family will also be around $2m). I expect to complete the sale of the first property in January 2020 and, after tax and professional fees, to receive approximately £1.75m. ….. “11.3 an account with Lloyds Bank in the UK, containing about £300,000. I have a certain level of residual expenses in the UK (for instance, the fees associated with a storage unit which I cannot empty as that would require me to travel to London, which I cannot do), which I fund from this account. When my wife and son return to Europe (returning to Europe to recharge and reconnect is very important for my wife, who has left her life there to come and live with me in a place which is culturally quite different, and where she has few friends), their expenses are also funded from this account. In addition, this is the account from which I have funded, and continue to fund, my expenses in this litigation (for example, counsel and expert fees). I expect it to be entirely depleted as a result of funding my own costs of this litigation; and “11.4 residual amounts in certain private equity funds, which total no more than $20,000. I have no control over when these funds are distributed.”