THE COURT WOULD NOT ORDER A SPLIT TRIAL: FUZZY LINES, COSTS, PREJUDICE AND OTHER FACTORS MEAN ALL ISSUES SHOULD BE HEARD TOGETHER

In Tatiana Soroka v Payne Hicks Beach (A Firm) [2025] EWHC 602 (Ch) Master Kaye refused the claimant’s application for a split trial.  The judgment considers in detail the guidance from the authorities and the matters the court should take into account. On the facts of this case there were a large number of factors that militated against a split trial.

(This isn’t the yacht in question, but you get the gist…)

“Standing back and looking at this in the round, taking a common sense and pragmatic approach, it seems to me the best course most consistent with the interests of justice and to enable the claim to be determined fairly and efficiently is to exercise my discretion to refuse the split trial even if I am wrong about the clear bright line. It is not consistent with the overriding objective or good case management to allow the Claimant’s application, and I refuse it.”

THE CASE

The defendant firm of solicitors acted for the claimant in divorce proceedings.  The claimant obtained an order that her former husband pay her £350 million.  The husband did not comply with the FRO and steps had to be taken to enforce the judgment.   Eventually the claimant entered into settlement agreements so the husband paid her something.

The claimant’s case was that a superyacht, said to be worth in the region of US$200,000,000 was part of her former husband’s assets.  She had asked the defendant to take steps to enforce the judgment against that yacht when it was moored in Miami in early 2017.  The claimant’s case was that if the yacht had been impounded then she would have had a stronger position in relation to settlement negotiations with her ex-husband and obtained a more favourable settlement.  Liability was denied by the defendant.

THE PROCEEDINGS

The claimant issued proceedings in August 2023.  In September 2024 the claimant applied for an order for a split trial, asking that breach of duty be tried as a preliminary issue.  The defendant opposed the application.

THE MASTER’S DECISION

The Master decided against ordering a split trial.

FUZZY LINES

19. There are dangers and unintended consequences, where an apparently bright line separating particular issues turns out not to be so bright or perhaps a little bit fuzzy. This is likely to be particularly acute when considering a split trial. There is an inherent risk of satellite disputes which would undermine the intended benefits of a split trial. If the split turns out to be in the wrong place or not clean there is the risk that the trial one judge cannot determine properly or at all those issues which the parties had intended to have determined at trial one. If there is a grey area or some fuzziness there may be missing evidence and disclosure at trial one or overlap, creep or seepage between the evidence and the issues to be determined at the two trials and/or worse that some issues might end up falling down a gap between the two.

20. The starting point and often the end point is therefore whether there is a sufficiently clear bright line between the issues to be determined at each stage such that in principle a split trial is possible.

21. If the court is satisfied that in principle a split trial is possible then it must consider all the circumstances of the particular case. Neither Steele v Steele nor Electrical Waste were intended to provide a comprehensive or exhaustive list of factors. The judge should stand back and take a common-sense pragmatic approach. Is it in the interests of justice having considered all the circumstances in a particular case, which will be unique to it, and consistent with the overriding objective and good case management to direct a split trial?

THE DANGERS OF OVERLAP BETWEEN THE TRIAL ON LIABILITY AND THE TRIAL ON CAUSATION

If one did not ignore the additional words in [36(e)] there seemed to me to be a real risk of fuzziness or greyness around the edges of what was to be determined at trial one. It seemed to me that would lead to the risk of the types of unintended consequences, satellite disputes and difficulties which the authorities warn against.

43. If Mr McPherson were right and one could construct a split trial which left over the final part of [36(e)] to causation, then one might be able to undertake a narrow and limited exercise in relation to breach and duty. But this did not appear to me to be a useful exercise. To my mind it risked either leaving a gap or creating an overlap between breach, duty and causation across two trials.

44. It seemed to me that there was at minimum a risk of overlap between [36(e)] and causation and no obvious means of avoiding it. I am not satisfied that a narrow determination of whether enforcement against the Luna was or might have been an option on its own is useful and it does not appear to me to satisfactorily address breach and duty as pleaded in [36]. If it is necessary to consider the favourability of the advice that the Claimant says she ought to have received, then it seems to me that questions of whether the Florida law advice would have been favourable and whether enforcement ought to have been pursued affect both issues of breach and causation and should only be determined once with all the relevant material available.

45. Mr McPherson’s submissions were attractively made but I was left with a real nagging doubt that the clear bright line was not clear or bright. The risk of seepage or creep into the causation issues or fuzziness around the edges appeared to me to be real. It seemed to me that it would be difficult to prevent consideration of what might be considered favourable or what might have been the positive advice at trial one. It just did not seem to me upon reflection that the proposed split advanced by the Claimant was quite as risk free or attractive as it first appeared.But even if there were a way to carve out breach and duty in a slightly different way so that the line was clearer and brighter, I was not ultimately persuaded that a split trial was the appropriate course as a matter of case management.

TIMING AND DELAY

47. It seems to me that if the entire trial can be accommodated in late 2026 that the advantages of a split trial in this case are significantly undermined. Unless the breach and duty trial were to be the catalyst for an early settlement then it would simply delay a final resolution until sometime in 2028 which to my mind is not in the interests of justice nor fair to either the Claimant or PHB and weighs against directing a split trial.

ADR AND SETTLEMENT

58. A split trial is on the facts of this case highly unlikely to enhance the prospects of an early settlement. Rather, it seems to me that a split trial is more likely to delay the time at which the parties will be in a position to sensibly consider settlement.

EVIDENCE

64. However, it seemed to me that the issue of witness evidence presented a more acute issue that militated against a split trial. Already key witnesses have limited recollection of the events in 2017.

65.If there were a split trial it appeared to be accepted that the Claimant would have to give evidence at both trials and so would Baroness Shackleton and some of the other PHB lawyers. Those trials may be 18 months apart. Just because trial two will be dealing with the Claimant’s hypothetical case does not make it less important. Not all the evidence will be “hypothetical”. I cannot ignore the strain and inconvenience of two trials on the witnesses just because the Claimant hopes that there will be a settlement and no second trial. Nor is the fact that the Claimant is prepared to attend a second trial an answer.

66. The fact that all the witnesses will give evidence at both trials and that the evidence will essentially overlap given the need to look at the counterfactual or hypothetical case at trial two is significant. Not only is it unfair to the witnesses but it seems to me that there are other risks inherent in witnesses giving evidence covering the same ground twice.

67. Revisiting events and reconstructing what happened 10 years ago will affect the reliability of the evidence of all of the witnesses. That is even more important where already there is evidence that the witnesses do not have a strong recollection of those events. It is important that the court keeps that in mind.

68. I had some sympathy with Mr Lawrence’s submission that on the facts of this case a split trial would give the witnesses a trial run. He argued that it was not realistic for the court to make findings about the conversations that took place in January 2017 in isolation. On PHB’s case there would need to be consideration of contextual matters covering a period of 2016 to 2021 such as the Claimant’s attitude towards her ex-husband, her sons, her perceptions of the prospects of success, her attitude to risk and to spending money. And on PHB’s case all of those same issues would need to be revisited on causation and loss when considering any particular hypothetical. PHB say it would be unfair for them if those contextual matters could not be explored at trial one but also unfair to them if they were then revisited at trial two.

69. Whilst I am not convinced that the position is quite as stark as presented by Mr Lawrence, I do consider there would be overlap between the evidence the witnesses would have to give at trial one and trial two and it would be preferable in those circumstances for all the evidence to be dealt with at the same time. The time since the events took place and the further potential delay caused by two trials is a particular factor in this case given the nature of the evidence. The potential prejudice to PHB in those circumstances is a factor to take into account.

70. My concern is of course heightened when one considers the guidance in CPR PD 57AC and the best practice guide about how to approach witness evidence and the risks associated with revisiting the same evidence several times.

71. There was a fundamental difference between the parties on expert evidence. Mr McPherson argues that if there is any expert evidence needed at all on breach and duty it is very narrow indeed, limited to the question of whether in principle it would have been possible to enforce against the Luna in Florida. But it seemed to me that that was far too narrow a question. Stopping where Mr McPherson proposed did not seem to me to address the second part of 36(e) which then segues into the broader questions the experts had to consider. Even if there was a line that could be drawn in relation to the expert evidence it was accepted that the Florida law experts would have to give evidence twice with the bulk of their evidence having to address the causation issues. But it seemed to me to be artificial to have the Florida law experts provide reports that stopped having indicated what the position was in principle when they were to be asked to opine on the various options available and whether they were favourable or positive for the Claimant and her prospects of achieving the outcome she contended for.

72. The need for the same experts to attend trial twice was a factor that weighed against a split trial – certainly in this case. It must be preferable for them to give evidence once on all the issues if at all possible. Although there will be other experts for the full trial whose evidence goes to issues of quantum, the Florida law experts will be critical to the question of what could have been achieved in Florida, how long it would have taken and what it would have cost.

73. This was not a case in which one could say that the expert evidence in trial one and trial two would not overlap.

74. I note that the SRFI which addresses issues of causation and loss has yet to be responded to. The Claimant has not responded to it yet on the basis that if she were successful in her application for a split trial she would have intended to resist responding until after trial one. Whether one includes this under factors that go to timing and delay, ADR or evidence, it is unlikely to promote an early settlement.

COSTS

75. I was underwhelmed by the information provided about the likely costs of the two trials. It did not seem to me that the Claimant had really grappled with the cost benefits or disadvantages of two trials.

76. The Claimant considers that she will incur approximately £371,000 for trial one. I consider the figure to be light. It was clear from the evidence and counsel’s submissions that the figure was based on an overly narrow approach to what would be in issue on trial one. The Claimant had instructed two counsel for the Claimant’s application and their brief fees alone were £61,000, the grade A fee earner’s hourly rate is £600ph with the junior fee earner on £450ph. The total costs for the Claimant’s application were approximately £135,000. These are not insignificant figures but they significantly undermine the reliability of the £371,000 figure for a 3 day trial on breach and duty with disclosure, witnesses and the potential for some expert evidence.

77. The Claimant considers she will incur approximately £2m for the full 20-day trial. There is no breakdown for that figure but an explanation of the complexity of the causation and loss issues and the extensive disclosure and expert evidence needed. It seemed to me that when considering the rates and the work which the Claimant says has to be undertaken for the full trial that the trial estimate was unrealistic too. Curiously, given that the Claimant must be assuming she would be successful on trial one I was not given any figures for the potential costs of trial two.

78. PHB have not provided any indication of the likely costs of any of this. I do have their costs schedule for the Claimant’s application which is weighted differently from the Claimant and exceeds £200,000 but their two counsels’ combined brief fees are £46,000.

79. It does not assist me when I am considering the costs impact of a split trial if the figures provided are not realistic. Doing the best I can it seems to me that the costs of trial one would be higher than the Claimant indicated and so too would the full trial costs.

80. When considering the likely costs of trial two, the costs of trial one are not simply deducted from the overall costs. As with the trial length there will be additional time and consequently costs involved in trial two if it is separate to trial one. There will be two sets of trial preparation and brief fees and the overall length of the two trials is likely to be longer in this case. The costs of two trials will be more than the costs of one trial.

81. Of course, if the Claimant were to be unsuccessful at trial one the claim would come to an end and there would be a saving of the rest of the costs.

82. The costs benefit of a split trial seems to me to weigh against a split trial. There is no obvious substantial saving unless the Claimant loses trial one and a real risk of increased overall cost if she wins.

83. On the Claimant’s case there will be two trials unless there is an earlier settlement. However, for the reasons set out above this is not a claim where a resolution of breach and duty will lead to an obvious immediate window of opportunity to settle. The parties will have to do some work on causation and loss before any such settlement discussions can be progressed. That therefore further reduces the benefit in costs terms of a split.

84. It remains my view that this is a claim where progressing breach, duty, causation and loss together will provide the best opportunity of reaching a position where settlement discussions can take place. It also seems to me to represent the right balance in terms of costs and benefit. It seems to me the reasonable and proportionate approach consistent with the overriding objective

PREJUDICE

85. It seems to me that a factor in this case which weighs against the Claimant is the prejudice to PHB.

86. The Claimant has made choices about when and how she has decided to advance this claim. There is no prejudice to the Claimant in requiring her to proceed with her claim in a timely manner consistent with the overriding objective.

87. That she has so far done so without resolving issues around the Settlement and now seeks to delay further when she might resolve those issues is not a factor in her favour or in favour of a split trial. It deprives PHB of the ability to make choices including around settlement.

88. A split trial would potentially leave these proceedings hanging over PHB and the Claimant until 2028. The strain and inconvenience and impact on all the witnesses is a factor that militates against a split trial. But I also take into account that it will leave the claim hanging over the individuals within PHB for some years. It is not their choice to delay matters. They oppose the split.

89. There is also the question of prejudice to other court users. Two trials will take up limited court resources and affect when and how other court users are able to access those resources. It is not simply the need for two trials but all the associated case management and applications.

90. There will inevitably be an issue if there are two different judges determining the two trials with the second judge having to read in and seek to take the claim forward from the decision of the first judge particularly if it turns out that there is some fuzziness around the edges of the trial one decision as seems likely here.

THE JUDGE’S CONCLUSION

91. As set out above I was far from persuaded that there is a clear clean and bright line between breach, duty, causation and loss in this case. But even if there were, the various factors I have identified all appeared to me to weigh against a split trial from a case management perspective.

92. The only real costs saving would be if there were a clean split and the Claimant were to fail on breach and duty. If, as the Claimant hopes, she is successful on breach and duty there would be no obvious costs saving at all. The assumption of an early settlement after a decision on breach and duty appeared to me to be misplaced without work and costs having been incurred in relation to causation and loss as set out above.

93. A split trial will cause delay to both the eventual determination of the claim and when it might be possible for the parties to engage in any sensible form of ADR. Inevitably that too will increase costs even if the full costs of a second trial are avoided. Progressing the full claim now including issues of causation and loss is more likely to lead to an earlier overall settlement.

94. I have real concerns about the need for the witnesses to give evidence twice, possibly 18 months apart. This is not just about the strain and inconvenience to the witnesses but about the fairness of the trial process and the reliability of that evidence. Whilst this is relied on by PHB it seems to me it affects both parties and the ability of the court to determine the claim fairly and justly.

95. The costs and inconvenience of the Florida law experts attending two trials is also a negative factor.

96. Although a single trial may have a level of complexity because the Claimant may advance options in relation to the hypotheticals, I was far from persuaded that those options would be significantly reduced by a determination on breach and duty. In order reduce to the options on causation and loss, any trial on breach and duty would have to go further than the narrow issues proposed by Mr McPherson. It would then creep into causation and so cease to have the clear or bright separation he argued for.

97. I have not addressed the risk of an appeal but given the nature of the case and its importance to both parties there would be a real risk that any trial on breach and duty would result in an appeal. Were it to do so that might delay trial two by a further year or more. Given the scope of the witness evidence and the historic nature of the underlying events the risk of further delay beyond even 2028 would be a further factor against a split trial. A single trial in late 2026 even if there were then an appeal would mean that all the witnesses would have given all of their evidence by then. That has to be preferable to having to revisit the events of 2017 in 2028 or 2029.

98. Standing back and looking at this in the round, taking a common sense and pragmatic approach, it seems to me the best course most consistent with the interests of justice and to enable the claim to be determined fairly and efficiently is to exercise my discretion to refuse the split trial even if I am wrong about the clear bright line. It is not consistent with the overriding objective or good case management to allow the Claimant’s application, and I refuse it.