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Practical Law Dispute Resolution – Indirect instruction: Fancy a flight?

Reproduced from Practical Law with the permission of the publishers. For further information visit or call 020 7542 6664.
Grahame Anderson discusses the Bao Xiang International Garment Centre and others v British Airways Plc case. 

What happened?

In Bao Xiang International Garment Centre and others v British Airways Plc, the claimants/respondents’ solicitors (the firm) had issued a claim form in the name of 64,697 claimants. The allegation was that BA and five other airlines had fixed prices as part of a cartel in 1999 and 2007 and were liable for (several billion pounds’ worth of) damages to tens of thousands of Chinese commercial claimants.
Indirect instruction
The claim form was signed by a partner of the firm. A statement of truth said that “the Claimants believe that the facts stated in the Particulars of Claim are true”. A legal officer for a Chinese social organisation, the China Chamber of International Commerce (CCOIC), had instructed the firm to issue in respect of a list of its members who it believed “were likely to have suffered harm as a result of the airlines’ cartel”. The firm was not instructed directly by any of the claimants but asserted that it was retained by CCOIC on their behalf. It was asserted to BA’s lawyers that “the Claimants are not obliged to disclose the nature or terms of any arrangement between [the firm] and CCOIC”. Attempts were then made to ratify the issue of proceedings.
In December 2014, BA issued an application to strike out the proceedings under CPR 3.4(2) or inherent jurisdiction on the basis that the claims were brought without authority or were an abuse of process.

Judgment of Mrs Justice Rose
It is perfectly possible retroactively to ratify proceedings issued without authority. This is a matter of English law where the proceedings are English. Rose J considered the speech of Roch LJ in Prestaciones Musicales SA v Secunda and another as binding to that effect. She did not, however, consider that the ratification forms used here did the job in this case.
Further, Rose J held that the issue of the claims was an abuse of process. Though there are circumstances in which it would not be an abuse to issue without formal instruction, the claims in this case did warrant strike out.
Practical lessons
The facts of the case must be rare. However, they are striking, and there are practical lessons for litigators that go beyond comments as trite as “make sure you don’t sign a statement of truth that is not true”.
As the High Court increasingly becomes a forum for pan-global litigation, keeping a handle on your own side (which may include lawyers, funders, insurers or clients in more than one time zone) becomes an increasingly pressing concern. While it may be right that the authority of a quasi-governmental body such as the CCOIC is a matter of foreign law in cases such as this, English lawyers now have it squarely that the question of ratification is one for domestic law. There is no excuse for ratifications that are not up to scratch. English firms will need to be assertive with their foreign counterparts and clients: they are officers of the court after all.
One never wants to look in disarray, but it is worse to look misleading. Even outside the context of international mega-money litigation such as this, this is important: we have all been in situations where a filing deadline or even limitation period approaches. Action needs to be taken to protect the client’s interests even where instructions are not forthcoming. As the judgment recognises, steps can be taken legitimately, but litigators must be alive to the questions in play. Ratification must be sought and sought properly, and proper consideration must be given to the factors that a court will take into account if strike out is ever in contemplation:
  • Is there a legitimate interest to protect?
  • Have reasonable steps been taken to explore other avenues?
  • What disclosure should be made to the other side to avoid accusations of misleading?
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