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Court refuses to order retrial after discovery of witness win bonuses

07/09/16

EnergySolutions Ltd v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC)

In 2014, the Nuclear Decommissioning Authority (“NDA”) held a tender competition for the second phase of the decommissioning of a number of UK power stations.  EnergySolutions Ltd (“ES”) had been the provider under the first stage of the decommissioning process.

ES was one of three unsuccessful bidders in the tender competition.  It issued proceedings against NDA claiming damages for breach of the Public Contracts Regulations 2006 (SI 2006 No.5).

Following a six week trial in November and December 2015, the Technology and Construction Court issued a draft judgment on liability (but not damages) on 14 July 2016 in favour of ES.  At about the same time, ES’s Solicitors, Freshfields Bruckhaus Derringer (“FBD”) informed NDA that it had just become aware that one of ES’s seven factual witness had given evidence on the terms of an agreement made some months previously that he was to receive a substantial payment, described as a “claim win bonus”, in the event that ES were to recover damages, either pursuant to a court judgment, or pursuant to a settlement. Shortly thereafter, FBD informed the NDA’s Solicitors, Burges Salmon (“BS”), that four other factual witnesses had given evidence on the same basis.  Therefore five of ES’s seven factual witnesses had been on a win bonus.

The agreed win bonuses for the five ES witnesses were in the aggregate sum of £183,000, being payments of, respectively, £100,000, £30,000, £22,000, £15,500 and £15,500.  The two highest win bonus agreements were entered into before the witnesses had signed their witness statements.  The three lower win bonus agreements were entered into after the relevant witnesses had signed their witness statements but before trial, or after trial but pursuant to informal agreements concluded before trial.

The NDA applied to the Judge (Fraser J) before the handing down of judgment in open court for orders that the claim should be struck out, alternatively that there should be a retrial, on the grounds that the agreements were an abuse of process and/or created a substantial risk that the trial had been unfair.

ES contended that any such order would be disproportionate, and that the appropriate response of the Court should be to order the witnesses to be recalled for further cross-examination.

Delivering judgment on NDA’s application (Judgment, para 904 to 940), Mr Justice Fraser held that both strike out and an order for a retrial would be disproportionate.  The win bonus arrangements merely went to the weight to be given to the evidence of the affected witnesses.  He declined to hold that the win bonus arrangements were inherently corrupt.  Only conduct at the extreme end of the scale, such as forging documents or mounting a campaign of dishonesty can justify denying access to the courts by striking out a claim such that it is never adjudicated upon.

The judgment appears here.

Mark Hapgood QC (who did not appear at the liability trial) appeared for the Nuclear Decommissioning Authority on the application to strike out or order a retrial.