“Romania was not considered by me – or indeed by any other business people as far as I knew at the time – to be a challenging or high risk place to do business”
“If you are ever uncertain about the laws or regulations that relate to your business activities, you must contact [the Legal and Compliance Department]”
“Fundamentally the evidence does not support the accusations made by the prosecutors. On the basis of the evidence presented it can only be concluded that the Credit Suisse individuals are collateral damage resulting from confusion between normal business practices and national security crimes in the pursuit of a wider public agenda.”
“ii) There are authorities which exemplify that witnesses of fact may be able to give opinion evidence which relates to the factual evidence which they give, particularly if they have relevant experience or knowledge. Such witnesses are not independent, and to that extent such evidence would need to be tested by reference to cogency and weight: ES (By her mother and litigation friend DS) v Chesterfield and North Derbyshire Royal Hospital NHS Trust[2003] EWCA Civ 1284 esp at [31]–[32], [41] and DN (By his father and litigation friend RN) v London Borough of Greenwich[2004] EWCA Civ 1659 esp at [25]-[26]. iii) This is particularly so where the evidence given is as to a hypothetical situation as to what would or could have happened: Kirkman v Euro Exide Corporation (CMP Batteries Ltd)[2007] EWCA Civ 66 esp at [13], [16]–[20] and Rogers v Hoyle[2015] QB 265 esp at [61]–[62] per Leggatt J (upheld in the CA). This is well illustrated in Globe Motors Inc v TRW Lucas Varity Electric Steering Ltd [2016] 1 CLC 712 CA at [92]. iv) Smith LJ in Kirkman at [19] considers that such hypothetical evidence is evidence of fact. Mr Hayman submits that this is limited to evidence as to what the person giving evidence himself, or possibly his company, could or would have done, but in my judgment it is not so limited and extends, provided that the witness can give evidence by reference to personal knowledge and involvement, to what would or could have happened in the counterfactual or hypothetical circumstances.”
“In Wiszniewski v Central Manchester HA [1998] P.I.Q.R. P324; [1998] Lloyd’s Rep. Med 223, Brooke LJ set out the principles as follows: “(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action. (2) If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness. (3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue. (4) If the reason for the witness’s absence or silence satisfies the court then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”
“(i) This evidential ‘rule’ is, as I have indicated above, a fairly narrow one …, the drawing of such inferences is not something to be lightly undertaken. (ii) Where a party relies on it, it is necessary for it to set out clearly (i) the point on which the inference is sought (ii) the reason why it is said that the ‘missing’ witness would have material evidence to give on that issue and (iii) why it is said that the party seeking to have the inference drawn has itself adduced relevant evidence on that issue. (iii) The court then has a discretion and will exercise it not just in the light of those principles, but also in the light of: (a) the overriding objective; and (b) an understanding that it arises against the background of an evidential world which shifts—both as to burden and as to the development of the case—during trial.”
“…it is an iterative process. The -- I think the – the way inwhich biases and the difficulties presented by biases, the way in which they're understood before a bad event that can be identified as being linked to those biases, the way things will appear before will be very different, probably, from the way they appear afterwards. So in a sense, you need to learn to stub your toe to then learn you shouldn’t kick a lamp post. It – before and after need to be taken into consideration, my Lord.”
“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 by the employer 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.”
“…in Roe v Minister of Health[1954] 2 QB 66 Denning LJ said that the questions of duty, causation and remoteness run continually into one another and continued (p 85): “It seems to me that they are simply three different ways of looking at one and the same problem. Starting with the proposition that a negligent person should be liable, within reason, for the consequences of his conduct, the extent of his liability is to be found by asking the one question: Is the consequence fairly to be regarded as within the risk created by the negligence? If so, the negligent person is liable for it: but otherwise not.”
“It is, no doubt, proper when considering tortious liability for negligence to analyse its elements and to say that the plaintiff must prove a duty owed to him by the defendant, a breach of that duty by the defendant, and consequent damage. But there can be no liability until the damage has been done. It is not the act but the consequences on which tortious liability is founded. Just as (as it has been said) there is no such thing as negligence in the air, so there is no such thing as liability in the air … It is vain to isolate the liability from its context and to say that B is or is not liable, and then to ask for what damage he is liable. For his liability is in respect of that damage and no other.”
“It is impermissible to postulate a duty of care to avoid one kind of damage - say, personal injury - and, finding the defendant guilty of failing to discharge that duty, to hold him liable for the damage actually suffered that is of another and independent kind - say, economic loss. … The question is always whether the defendant was under a duty to avoid or prevent that damage, but the actual nature of the damage suffered is relevant to the existence and extent of any duty to avoid or prevent it.”
“It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the duty by reference to the kind of damage from which A must take care to save B harmless.”
“before the existence and scope of any liability can be determined, it is necessary first to determine for what purposes and in what circumstances the information in question is to be given.”
“One of the most important distinctions always to be observed lies in the law's essentially different approach to the different kinds of damage which one party may have suffered in consequence of the acts or omissions of another. It is one thing to owe a duty of care to avoid causing injury to the person or property of others. It is quite another to avoid causing others to suffer purely economic loss.”
“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.”
“It seems to me that it would require of employers, many of whom may have no such resources of advice or experience as may be available to this defendant, and who may employ one or two servants, to discover much information about foreign legal and social systems in order to decide whether such a term requires action on their part.”
“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.”
“As I understand Scally, it recognises that, just as in the earlier authorities the courts were prepared to imply by necessary implication a term imposing a duty on an employer to exercise due care for the physical wellbeing of his employees, so in the appropriate circumstances would the court imply a like duty as to his economic wellbeing, the duty as to his economic wellbeing giving rise to an action for damages if it is breached.”
“At no point during my time in Romania did I regard it as a dangerous place to be or a “high risk” country, including in 2005-2006. Nor was that the view (so far as I am aware) of other diplomats or foreigners doing business in Romania”
“Adverse press coverage of the Petrom privatisation from May 2006 and the interest of the Romanian secret police in that transaction, which it is reasonably to be inferred (the Defendant’s disclosure on this point being inadequate to date) the Defendant knew about given that it was the subject of the adverse coverage and it was involved in the Petrom transaction and/ or which should have been known to the Defendant if it had conducted adequate regular assessments of risk.”
“I have no way of assessing whether the disclosure given thus far has been inadequate, but I accept Mr Ciumei's assurance that these are the best particulars which the Claimant can presently give. I give permission to amend the pleading as requested, subject, however, to an important caveat: I do so on the express understanding (which seems to me clear from the pleading) that at present there is no case of actual knowledge made against the Defendant. If proper grounds for such a serious allegation were to emerge, I would expect a further application to be made to amend to make such allegation expressly. Any such application would of course fall to be considered by the Court on its merits when made.”
“On17 November 2006 , DM (Mr Mucea) contacted RR (Mr Rao) regarding the questioning on the Petrom privatisation which DM was due to undergo with the commission headed by the Secret Police under the supervision of the President of the country. VB (Mr Benyatov) and RR travelled to Romania on21 November 2006 (RR checked with his Managing Director, MH (Mr Harris), before going to Romania). The purpose of the trip was to help prepare DM to respond to the various questions he would be asked.”
“The degree to which thorough risk management processes in banks was followed varied enormously and in my experience during the Relevant Period compliance departments were, unfortunately, far less influential (or indeed ‘listened to’) than post 2008 (ie post the financial crisis)”
“Risk management is a structured process to identify, measure, monitor and report risk. The risk management, controlling and legal and compliance functions operate independently of the front office to ensure the integrity of the risk and control processes. The risk management functions are responsible for implementing the relevant risk policies, developing tools to assist senior management to determine risk appetite and assessing the overall risk profile of the Group.”
“Had we known that there was this type of risk, it would have been a bit illogical not only to expose individuals, if I may say, but also expose the bank. Let's not forget that Credit Suisse also had reputation damage out of this whole sequence of events.”
“12. The following principles are not in dispute and may be summarised in these propositions: i) A cause of action in negligence does not arise until the claimant suffers damage as a result of the defendant's negligent act or omission. ii) The damage must be ‘real’ as distinct from minimal: Cartledge v Jopling[1963] AC 758 per Lord Reid at 771 and Lord Evershed MR at 773–4. iii) Actual damage is any detriment, liability or loss capable of assessment in money terms and includes liability which may arise on a contingency: Forsted v Outred[1982] 1WLR 86 per Stephenson LJ at 94, approved by the House of Lords in Nykredit per Lord Nicholls (with whom the other members of the appellate committee agreed) at 630F. iv) The loss must be relevant in the sense that it falls within the measure of damages applicable to the wrong in question: Nykredit at 1630F. (Propositions i) to iv) were confirmed by Sir Murray Stuart-Smith in Khan v Falvey at paragraphs 11 and 12.) v) A claimant cannot defeat the statute of limitations by claiming only in respect of damage which occurs within the limitation period if he has suffered damage from the same wrongful act outside that period: Khan v Falvey at paragraph 23, following Knapp v Ecclesiastical Insurance Group Plc [1998] PNLR 172 per Hobhouse LJ at 184 and 187.”
“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.”
“ The hallmark of a term implied in fact is that it is implied into a “particular” contract in order to give effect to the presumed intention of the parties to that contract,whereas a term implied in law is implied as “a general rule … in all contracts of a certain type” or as “a standardised term” into a “definable category of contractual relationship”
"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. "
"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. "
“In respect of the latter category (losses suffered through the wrongs of third parties), where the losses were suffered while carrying out an action specifically directed by the principal there is likely to be a right of indemnity if the agent cannot recover from the wrongdoer.”
“The authorities on which it is understood that C relies to support his claim are considered below. On analysis, they support D’s position on scope of the indemnity. (1) Fletcher v Harcot (1622) Hutton 56: The defendant (a sheriff) asked the plaintiff (an innkeeper) to keep a third party (Batersby) prisoner. Batersby sued the plaintiff for false imprisonment and the plaintiff sought an indemnity for the sum which he had paid to his lawyers in defence of the action. This is a case in which the indemnity covered sums paid to third parties. (2) Adamson v Jarvis (1827) 4 Bing 66: The defendant falsely represented to the plaintiff that he had a right to sell property and directed the plaintiff to do so on his behalf. The true owner of the goods then recovered the value of the goods from the plaintiff and the plaintiff sought to recover this from the defendant. This was therefore a case in which the ‘loss’ sought was a sum paid to a third party. (3) Frixione v Tagliaferro(1856) 14 ER 459: The plaintiff paid damages to a purchaser of cargo after defending a claim for breach of contract on behalf of the defendant, his principal. He then sued under an implied indemnity for the legal costs of doing so, which were sums paid to a third party, his lawyer. He was also awarded interest on that sum (as to which see further below). (4) The James Seddon (1866) LR 1 A&E 62: Two crew members brought a murder charge against the Master of a vessel. The Master was bound over to prosecute them for perjury in the sum of£10 . He also incurred expenses defending the murder charge against him and returning the vessel to its owner. He was able to claim under an implied indemnity for these expenses from the ship owner. (5) Lacey v Hill(1874) LR 18 Eq 182: Stockbrokers were directed to purchase stock for their principal and entered into contracts to do so. The principal then became bankrupt and the brokers were entitled to be indemnified (and to prove that entitlement in the bankruptcy) for the liability which they had incurred to the vendor. While this case establishes that the implied indemnity extends to liabilities not already paid by an agent to a third party, the sums here were (as in all the other cases) monies paid or payable to such a third party. (6) Birmingham and District Land Co v London and North Western Railway Co(1886) Ch D 261 : BDL entered into a contract with a land company to demise land, which agreement was voidable if buildings were not complete within a certain time. BDL sold the land to LNWR, subject to the contract with the land company. The buildings were not completed on time and LNWR took possession and treated the agreement as at an end. The land company sued LNWR alleging that BDL had agreed an extension of time for completion of the work. LNWR sought to bring a claim against BDL for a contribution or indemnity in respect of any liability it was found to owe the land company. Again, the indemnity here was in respect of a liability to a third party. (7) Sheffield Corporation v Barclay[1905] AC 392 : A joint owner of Corporation stock (Mr Timbrell) forged the transfer of stock and borrowed money on the security of the stock. The bank sent the transfer to the Corporation and sought to be registered as holders of the stock. The stock was then sold to a third party. After Mr Timbrell’s death, the fraud came to light and the other joint owner (Mr Honeywill) recovered against the Corporation. The Corporation brought a claim for an indemnity against the bank in respect of its liability to Mr Honeywill. This is therefore again a claim in respect of liabilities to third parties. As well as the facts, it is clear from the speeches of Earl of Halsbury and Lord Davey (with both of whom Lord Robertson agreed) that they considered the indemnity to apply where doing an act at the request of another turns out to be injurious to the rights of a third party (see D’s opening skeleton at §55(6)) and therefore sums become payable by the agent to that third party. (8) In re Famatina Development Corporation Ltd[1914] 2 Ch 371 : The applicant was employed by a company as a consulting engineer to report on the company’s properties in the Argentine. He did so and criticised the company’s managing director, who brought an action for defamation, which was ultimately dismissed. He sought to recover the costs (payable to his third party lawyer) incurred in defending that claim. At first instance his claim was dismissed because it was held that he was not defending the action on behalf of his principals (281). On appeal, the Court of Appeal held that defending the claim was pursuant to his duties as agent and therefore that he could recover the sums paid to his lawyers. C relies on the short judgment of Lord Cozens-Hardy MR. However, the judge was plainly not seeking to expand the scope of the losses recoverable beyond sums paid to third parties, in a case where the issue did not arise and had not been argued, and where the basis of the decision was that the acts were done in the course of his agency. (9) Gregory v Ford[1951] 1 All ER 121 : An employee negligently drove a lorry during the course of his employment, causing a collision with a motorcycle. He was sued by the motorcycle driver and claimed an indemnity from his employers in respect of the damages he was required to pay. This is again a case of indemnification in respect of a liability to a third party. (10) Coulson v News Group Newspapers Ltd[2012] EWCA Civ 1547 : C relies on this in his opening skeleton (at §67) because it “refer[s] with approval to these indemnities”
“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.”
“The Defendant's formulation of the limit on the principle is arguably inconsistent with the dictum of Lord Cozens-Hardy MR set out at paragraph 140 above and with the cases where an employee or agent has recovered his own losses in the form of legal defence costs.”
“It is preferable, in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable 'considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed.'”
“Following the Caparo case, the characteristic approach of the common law in such situations is to develop incrementally and by analogy with established authority. The drawing of an analogy depends on identifying the legally significant features of the situations with which the earlier authorities were concerned. The courts also have to exercise judgement when deciding whether a duty of care should be recognised in a novel type of case.”
“The second reason is that judges, in developing the law, must have regard to the policies expressed by Parliament in legislation. Employment law requires a balancing of the interests of employers and employees, with proper regard not only to the individual dignity and worth of the employees but also to the general economic interest. Subject to observance of fundamental human rights, the point at which this balance should be struck is a matter for democratic decision. The development of the common law by the judges plays a subsidiary role. Their traditional function is to adapt and modernise the common law. But such developments must be consistent with legislative policy as expressed in statutes. The courts may proceed in harmony with Parliament but there should be no discord.”
“In respect of the latter category (losses suffered through the wrongs of third parties), where the losses were suffered while carrying out an action specifically directed by the principal there is likely to be a right of indemnity if the agent cannot recover from the wrongdoer. The position in respect of the wrongs of others suffered incidentally in the course of the agency is less clear.”
“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 could cause it to be considered remote. Then the charge was made against him, and it takes the shape of a prosecution, as I understand it, for murder, and large expenses are incurred by the captain in defending himself against this false charge. What is that but defending himself against the consequences of the performance of his own duty, and which, if he had not performed, he would have been greatly to blame?”
“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.”
“Notwithstanding recent criticisms of the decision which have high authority, Hollington v F Hewthorn & Co Ltd was treated as clear authority by the Privy Council in Hui Chiming v R. [1992] 1 A.C. 34 PC at 43, [that a conviction “amounted to no more than evidence of the opinion of that jury”]. Consequently it is probably safe to say that the rule still applies in all cases not covered by a common law exception (see paras 43–81 to 43–84) or the various statutory exceptions (see paras 43-85 et seq.) … In Al-Hawaz v The Thomas Cook Group Ltd [Keene J. 27.10.00. New Law Online 2001 019305”] the scope of the rule in Hollington v F Hewthorn & Co Ltd was challenged. It was argued that the decision is only binding authority on the admissibility of previous criminal convictions. Whilst accepting that this originally would have been correct, the court held that the decision had been applied to civil judgments in subsequent cases by higher courts. Moreover, the reasoning of Hollington is logically applicable to earlier civil judgments; both criminal and civil judgments are technically expressions of opinion and inadmissible as such. The court affirmed that the principles adumbrated in Hollington remain applicable to findings in earlier civil cases as well as earlier criminal cases.”
“In my judgment, in a case where a defendant to civil recovery proceedings has been convicted, Parliament cannot have intended that a conviction in a court outside the United Kingdom should be treated as irrelevant to prove the matter required by section 241.
“if I had understood that by conducting normal investment banking business in Romania I was exposing myself to a serious risk of arrest (let alone a criminal conviction) I would simply not have gone”
“It is well-established that, when considering damages in a hypothetical counterfactual, the Court must adopt a realistic approach, tailored to the specific facts of the case [see Ratcliffe v Evans[1892] 2 QB 524 CA at page 532-533]. A claimant is not required to “perform the impossible”