Overturning a summary judgement

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Gannons successfully appealed against a summary judgement made against a firm of London insurance brokers.

Our clients, the defendants, were a firm of London insurance brokers. The claimants were a firm of national insurance lenders. The claimant lends money to people taking out insurance policies, to pay their insurance premiums. Between 2010 and 2014, our client was the sole agent for the claimant. Our client had the claimant’s authority and a formal agency agreement was in place. However, in late 2014, the claimant issued a claim. The claim alleged that our client had withheld monies from them. Therefore they claimed damages for breach of agency, breach of trust and fraudulent misrepresentation.

The concept of summary judgement

A summary judgement is where a court grants a pre-trial judgement, since there is no good reason for a trial. Usually there is no genuine issue about the material facts, and one party is clearly likely to win.

Appealing the judgement

We appealed to the Court of Appeal to set aside the summary judgement. Our appeal succeeded. Consequently our client was able to continue its defence against the main claim.


After successfully defending the main claim, our client pursued a counterclaim against the claimant for loss of profits. They also claimed the costs they incurred for both the initial summary judgement hearing and the appeal hearing. Additionally they introduced a third party as a further defendant, following the claimant’s disclosure of documents.

Our client’s defence

Our client argued that they did not transfer or deal with the funds direct. Therefore, they had no knowledge of monies being withheld. They believed that they had followed the terms of the agency agreement relating to the transfer of funds.

Summary judgement

The claimant applied for an immediate summary judgement. This was on the grounds that our client’s defence had no reasonable prospects of succeeding and so there was no compelling reason for a full trial. The High Court granted the summary judgement in favour of the claimant, which we appealed.

Our arguments in the Court of Appeal

In the Court of Appeal, we argued that the High Court should not have granted a summary judgement because the proceedings were too complex. They hinged on fundamental conflicts between the parties and required required various witnesses to account for their actions.

We also argued that the High Court judge was wrong to bring proceedings to an end and conduct a mini-trial on the current evidence, which led to the summary judgement being granted.

The need for a full trial

A full trial was required because important oral evidence had to be given and a mini-trial was an inappropriate method of dealing with the summary judgement application. Furthermore, due to the seriousness of the allegations the defendants should have been given the opportunity to rebut the claimant’s dishonesty and fraud allegations. Finally, our client suspected the involvement of a third-party, but needed time to confirm this.

Summary judgement set aside

The Court of Appeal allowed our appeal. They stated that it would be wrong to not interfere in a case where a judge had erred in principle, even if our client’s defence had little chance of succeeding. Additionally, there were compelling reasons for a full trial, for example to preserve the reputation of our clients. The Court of Appeal also stated that the High Court judge was wrong to conduct a mini-trial and make the summary judgement on the limited facts available.

Subsequent court case

After the Court of Appeal awarded our client their costs for the initial hearing and the appeal, they also set directions for the management of the dispute resolution. Later our client’s suspicions about there being third party involvement were confirmed by disclosure. An intermediary first received our client’s payments and then paid the claimants through a chain of commission agreements. We successfully applied to the court to add the intermediary as an additional defendant, and won the ensuing counterclaim that we pursued.

Importance of tactical applications for dispute resolution

Businesses should understand litigation procedures and dispute resolution tactics. The claimant must now pay a large costs bill, due to their overly aggressive approach.

Our approach is to first consider the big picture, then focus on the most appropriate road to dispute resolution. Alex Kleanthous is the partner heading the dispute team. Alex has a breadth of experience relating to summary judgement applications, both for applicants and respondents.

  • Gannons were tenacious in pursuing every available option for us