On 16 October 2025, the Court of Appeal (Phillips, Nugee and Jeremy Baker LJJ) handed down judgment in ENRC v the Director of the Serious Fraud Office, Dechert and Gerrard [2025] EWCA Civ 1307.
Background
The appeal arose in the context of two long-running sets of Commercial Court proceedings, brought by ENRC against (1) the SFO (2) Dechert LLP and (3) Neil Gerrard (ENRC’s former solicitors), for wrongdoing which had resulted in a criminal investigation being opened into ENRC. The proceedings have been jointly managed together by Waksman J (“the Judge”) since 2020. It was decided in 2020 to bifurcate proceedings and have separate liability and quantum trials.
Following an 11-week trial on liability (“Phase 1”), the Judge handed down judgment in 2022 ([2022] EWHC 1138 (Comm)). In a separate trial (the “Phase 1A” trial) in 2023, the Judge considered certain issues of causation, loss and contribution following the Phase 1 Judgment. Judgment in Phase 1A was handed down in late 2023 ([2023] EWHC 3280 (Comm)).
Phase 2
Phase 2 of the proceedings will deal with the remaining issues of quantum and has been listed for trial in the spring of 2026. ENRC provided further information of its quantum claim in August 2024. Its claim included c.$128m which was attributable to the increased costs of its subsidiaries which it claims were caused by the Defendants’ wrongdoing. For those claims to be advanced, ENRC needed to amend its pleadings. The Defendants resisted the amendments, principally on the basis that any losses attributable to the subsidiaries of ENRC needed to be proven by ENRC, and because a document hold had not been imposed on each of the subsidiaries, they would suffer prejudice if documents which could be relevant to the proceedings were not ultimately retained and disclosed.
The Judge refused the subsidiary amendments for that reason. He considered that the absence of a document hold over each of the subsidiaries was crucial, and that the prejudice to the Defendants in the risk of possibly relevant documents no longer being available outweighed the prejudice to the Claimant in being prevented from claiming for the losses which related to the subsidiaries.
The appeal
ENRC appealed, principally on the ground that the Judge applied the wrong test—whether he could be sure that none of the subsidiaries’ documents which would have been caught by a litigation hold could be relevant—requiring ENRC to prove a near-impossible negative.
The Court of Appeal allowed the appeal. Key findings from the judgment of Phillips LJ included:
- While the amendments were “late” in the technical sense—because they could have been made earlier—lateness is relative: if the application to amend is made at an early stage of the “relevant phase of the proceedings”, before decisions as to disclosure and the exchange of witness statements and expert reports, “the lateness will far more readily be excused by the Court and it will be harder for the party resisting the amendment to demonstrate that the prejudice it would suffer by the amendment being permitted would outweigh the prejudice occasioned by its refusal” (at [31], see also [38]).
- The central issue with the Judge’s reasoning was that “it regarded an entirely uncertain and unquantified risk of injustice to the defendants as outweighing the certain and substantial injustice to ENRC, notwithstanding that it was unnecessary to reach a final view on that balancing exercise given the very early stages of the Phase 2 process in which the issue arose.” This was not consistent with the overriding objective (at [36]).
- The appropriate starting point was instead to consider “the nature, extent and timing” of the amendments proposed. “A claimant which had proved very serious wrongdoing on the part of the defendants was now, at the pre-CMC stage of the quantum phase, seeking to re-formulate its claim for very substantial losses which had always been pleaded (amounting to some US$128 million including interest) due to a late realisation as to which companies in a group had incurred them. Given that the re-formulated loss claim passed the prospects and cogency tests, to refuse such an amendment would be hugely prejudicial to the claimant” (at [37]).
- There was no or no sufficient evidence of prejudice to the defendants capable of outweighing that to ENRC by disallowing the amendments. Instead, “[t]he proper approach would have been to allow the amendments, but to keep under review, if necessary, whether any subsequent failure to provide disclosure of the subsidiaries’ documents rendered a fair trial of the issues impossible, notwithstanding the possibility of making allowances or drawing adverse inferences at trial.” (at [42]).
- The absence of a litigation hold is not, by itself, prejudicial to the opposing party (at [43]).
A copy of the judgment can be found here.
Nathan Pillow KC, Tim Akkouh KC and Ben Cartwright acted for ENRC (with Alyssa Stansbury of One Essex Court), instructed by Michael Roberts of Hogan Lovells International LLP (for the appeal) and subsequently Michelle Duncan of Joseph Hage Aaronson & Bremen LLP (for the trial). Freddie Popplewell also acts for ENRC in the ongoing trial proceedings.
Jonathan Hough KC (of 4 New Square), Tom Richards KC and George Molyneaux (both of Blackstone Chambers), instructed by Eversheds Sutherland (International) LLP, acted for the Director of the Serious Fraud Office.
Richard Millett KC and Sophia Hurst instructed by Clyde & Co LLP acted for Dechert LLP. Edward Harrison KC of Brick Court Chambers also acts for Dechert in the ongoing proceedings.
