On 22 October 2025, Henshaw J handed down judgment in Arcadia v Bosworth, Hurley, and Kelbrick [2025] EWHC 2724, addressing the question of whether a party can rely on its own wrong in the context of causation.
Following a 10-week $325m trial in the summer of 2024, in January 2025 Henshaw J dismissed substantial civil fraud claims against the Defendants, discharged the freezing injunction against them, and ordered there be an inquiry into damages in relation to what losses (if any) the Defendants had suffered by reason of the freezing injunction that the Claimants had obtained in 2015 (the Inquiry).
The Defendants’ case in the Inquiry is that the freezing injunction caused various heads of loss, for which they should be compensated. The Claimants’ case is that any loss was caused not by the freezing injunction but by the underlying allegations of fraud in the proceedings. In Reply, the Defendants pleaded that the Claimants could not rely on any causative effect of the underlying allegations of fraud in the proceedings because those allegations had themselves been dishonestly made by the Claimants and the Claimants should not be permitted to rely on their own wrong (the wrong consisting of dishonestly making fraud allegations). A question then arose on an interim application as to whether the Defendants’ arguments had realistic prospects of success as a matter of law.
Henshaw J held that the Defendants did have realistic prospects of success of arguing that the Claimants should not be permitted to rely on their own wrong to defeat the Defendants’ claims in the Inquiry as a matter for causation. He held (inter alia) that the ‘own wrong’ principle reflects a principle of public policy of general application.
A copy of the judgment can be found here.
Freddie Popplewell acted for the Fifth Defendant, led by Tom Sprange KC, and instructed by Sarah Walker of King & Spalding International LLP.
