Tobias Gruber & Others v (1) Aig Management France Sa

The 27 claimants in this action are all ex-employees of the first defendant, AIG Management France SA formerly known as Banque AIG, a French company, or in the case of three of them, employees of the second defendant, AIG Financial Products Corp, a Delaware corporation, but who were seconded to work for the first defendant’s London branch along with all the other claimants.

The third defendant is not relevant for present purposes. The fourth defendant, AIG Trading Group Inc is another Delaware company. The fifth defendant, AIG Asset Management (Europe) Limited, is an English company. The sixth and seventh defendants, AIG Markets Inc and American International Group Inc, are also Delaware companies, and the seventh defendant is the ultimate holding company for the various AIG companies.

Because of the number of defendants and for the sake of brevity I am going to refer to them hereafter simply as D1, D2, et cetera, except where the context otherwise requires.

All the claimants seek compensation for non-payment of substantial sums which they say were owed to them by way of annual bonuses, but which in truth would comprise a large proportion of their employment income, pursuant to two particular schemes known as the deferred compensation plan (DCP) and the special incentive plan (SIP). It is unquestionably the case that on the face of the plan documents, the primary party liable thereunder is D2, as will appear in due course. Indeed, that is the claimants' primary case. The claimants also say that along with D2, D1, as their former employer, is also liable. However, that contention is not a matter in issue today.

As might be expected, the non-payment of the sums said to be owing to the claimants followed the financial crises of 2007 and 2008, in which the AIG group suffered enormous losses. From at least October 2008 onwards, D2 asserted that no further sums were then payable under the plans or would be likely to be paid in the future, because D2 was entitled to set off against the profit figures in certain periods (on the basis of which the bonus payments would be drawn) the large losses made in other periods. This resulted not merely in a zero balance but what has been referred to as a negative balance on the claimants' bonus payment accounts.

The claimants contend that this constituted a breach of contract and it is said that the total claims could exceed $100 million.

On 8 October 2014 the claimants issued a claim form against all seven defendants. On 6 February 2015 the claimants served the claim form on D5, the only English defendant. The other defendants were served out of the jurisdiction with permission of the court between 2 and 7 April 2015.

On 10 April 2015 the claimants served Particulars of Claim. Although expressed to be only as against D5, it is accepted that the allegations made therein will in due course appear in the same or substantially the same form as against the other defendants where relevant.

The following applications are now before me.

I should record the extensive evidence which was filed on the various applications. On the applications made by D4 to D6, there is the first witness statement (WS) of Suzanne Horne, a solicitor for all of the defendants, dated 10 March 2015. That was accompanied on the same date by the first WS of Angela Daniel, who is the head of the finance function of D5. The there is the third and fourth WSs of Kiersten Lucas, a solicitor for the claimants, dated 26 March and dated 10 April. Then the fourth WS of Ms Horne dated 15 May, and eighth WS of Ms Lucas dated 12 June, and a WS of Mark Balfan, the chief financial officer and managing director of D2, D4, and the CFO of D6, dated 15 May. There is a sixth WS of Ms Horne dated 26 June and the eighth WS of Ms Lucas dated the 15 June. In relation to joinder, there is Ms Lucas's sixth WS statement of 15 May, Ms Horne's fifth WS of 29 May, and the seventh WS of Ms Lucas dated 9 June.

The point which lies at the heart of the separate applications made by D5 and D6 is the same and I  deal with it first.

It arises out of provisions contained in both the DCP and the SIP in materially the same form. It is agreed that for present purposes reference should be made to the 2010 version of the DCP. This document is headed in capitals "AIG FINANCIAL PRODUCTS CORP [that is D2] DEFERRED COMPENSATION PLAN."

And underneath that, and I quote:

I then move to the material clause which is 4.01, which is headed "AIGFP's liabilities". Subparagraph (a) reads:

Sub-paragraph (b) begins:

That sets out the basis under which losses can be taken into account and I quote further from the same subparagraph:

Then the final part of that subparagraph reads:

For present purposes I concentrate upon that final part of clause 4.01(b) to which I shall refer as “the transfer provision”.

The claimants contend in the Particulars of Claim, and in the alternative to their primary case against D1 and D2, that there has been a transfer of all or substantially all of D2's assets to D5 and/or D6, such that the latter are now liable in respect of the monies due to the claimants under the plans and not D2.

It is important to understand how this alternative contention came about. In correspondence the solicitors for the claimants suggested that the transfer provision might have been engaged and they were concerned to know (a) if AIG, to use a collective term, contended that there had been such a transfer, and (b) if so, to whom or (c) whether, as the claimants principally contended, they accepted that D2 was liable. Any doubts on this score were laid to rest in the evidence before me and indeed by reason of the very applications made by D5 and D6. Leaving to one side D2's contention that it has a substantive defence to the claim, in other words the actions it took were justified, it accepts that if the claim is well-founded that it indeed is the party liable. See by way of example paragraph 16 of the sixth WS of Ms Horne made on 26 June 2015.

One might have thought that this was the end of the matter. The claimants now had the comfort they sought and it was now common ground that the correct defendant was D2, leaving to one side the claim that D1 was also liable and a separate argument that D4 was jointly and severally liable, which I deal with below (neither of which points concern the issue here).

However, as can be seen from the Particulars of Claim, the claimants wish to maintain their so-called alternative case against D5 and/or D6, even though their primary case has been admitted by AIG.

In oral argument the reason for this, in my judgment, became clear. There is a concern on the claimants' part that D2 may not be able to discharge its unsecured liability to the them in the event that they succeed on the merits. D5, and/or D6 may, however, be able to do so. Even if the claimants cannot show now that the transfer provision was engaged so that D5 and/or D6 become liable, they might be able to do so later, after disclosure and/or cross-examination, and they might then change horses as it were and make the liability of D5 and/or D6 their primary case.

Although Mr Leiper in oral argument sought to suggest there was more to it than that, because the claimants wished to test out whether D2's acceptance of liability under the plans was "real" as opposed to tactical, that in my view boils down to the same thing. It is moreover a curious argument when it remains C's primary case that D2 is the correct party – so this suggestion does not really add anything.

The Claimant’s position is a very odd one to take. It would mean that D5 and D6 are in this action on a speculative basis. It is at present a position which is wholly inconsistent with the claimants' own primary case, which is that D2 is liable, which means there has been no transfer. It also fails to answer the question that if there has been a transfer, is it to D5 or to D6?

An alternative case usually arises where the claimants' primary case is denied by the relevant defendant and there is in that event an alternative case, but here, the primary is admitted. On that footing, not only is there no serious issue to be tried as between the claimants and D6, there is no issue at all.

For the same reason it cannot be said that as against D5 the claimants have a real prospect of success. Nor do I consider, in relation to the claim against D5, that C's desire to keep it in the action in case (a) it can later show that the transfer provision was engaged in relation to it and (b) it wished to make that its primary case because it preferred to have a judgment against D6, that this can constitute some other compelling reason for a trial.

The above findings are enough to dispose of this point, to set aside service as against D6 and dismiss the claim as against D5. However, there was extensive argument before me that on the present materials there was in fact no real prospect of the claimants showing that there had been a relevant transfer to D5 or D6 anyway. Accordingly I now deal with that matter as well.

While there is at the beginning of the DCP plan a definition called AIGFP, which includes if applicable any subsidiaries, and D4 and its subsidiaries, it is plain from clause 4.01 that the liability is that of D2 alone, referred to by its full name (a matter which will be explored further when I deal with the position in relation to D4), and consistent with that, the transfer provision concerns D2 and D2 alone. Again it is here referred to not as AIGFP but by its full name. Accordingly the question is whether it, ie D2, has transferred all or substantially all of its assets to some other entity.

I consider first the position of D2 itself. It is common ground that it has since 2008 been in the process of winding down its operations. Those operations consisted of D2 acting as principal in standard and customised financial transactions involving interest rate, currency, equity, commodity, energy and credit products, with top tier corporations, financial institutions, government agencies, institutional investors and high net worth individuals throughout the world. It also raises funds through municipal investment contracts, investing the proceeds in a diversified portfolio of securities and derivative transactions. That appears in paragraph 12 of Ms Horne's first WS and has not been challenged. The key point here is the essential activity of D2 as being a proprietary one, as Mr Hunter put it, or acting as a principal.

In paragraph 13 Ms Horne goes on to say that parts of its portfolio suffered significant losses; it received some government support. In paragraph 14 she says that since October 2008 it has been unwinding its business and portfolios, but the wind-down will take a substantial period of time due to the long-term duration of the derivative contracts and the complexities of the portfolios.

As to what D2's assets were and are, there is evidence from Mr Balfan. Prior to making his own WS his evidence was conveyed through Ms Horne's first WS to show the asset position of D2 as follows and as set out in a table in paragraph 16. This shows the assets and the liabilities' position by reference to unaudited balance sheet figures. As at the end of 2011, US$29 billion of assets and US$64 billion liabilities. As at the end of 2012, US$22 billion of assets and US$57 billion of liabilities. At the end of 2013, US$19 billion assets, and US$53 liabilities, and at the end of September 2014, US$15 billion assets and US$49 billion liabilities. The net position broadly speaking has been the same, namely a negative position of US$35 or US$34 billion.

It is plain from those figures that the total number of positions held has fallen, albeit that the net negative equity remains about the same. This is because D2 has disposed of a number of them, which otherwise might take years before they expire or close out. As Ms Horne explains in paragraph 17, this is all part of the wind-down of its business, which nonetheless has to be managed actively in the meantime. But the fact that it is in run-off, as it were, does not entail that it must have transferred all or substantially all of its assets to D5 or D6, or indeed to any single entity.

Points have been taken as to whether there has been adequate disclosure of D2's asset position. Mr Balfan's evidence is that the defendant no longer produces standalone accounts and its accounts are now a part of the consolidated group accounts. They form part of the reporting within the voluminous Form 10-K documents produced by D7. The claimants have had the option of reviewing those documents which are publicly available on AIG's website. I see no reason to doubt the accuracy or broad accuracy of the figures shown in the table at paragraph 16.

Against that background it is necessary to consider the position of D5. As its name suggests, it is not in the business of holding or dealing in derivatives, etc , as principal. Rather it manages such assets for others. Its position and operations are set out in detail in the WS of Ms Daniel. Given its essential management role set out in particular at paragraph 6 of that WS, it would be surprising if it acquired all or substantially all of D2's assets.

Asits own account shows, and there has been extensive financial disclosure here, its net assets increased from £2 million in 2008 to £7.5 million in 2010, £13 million in 2011 and up to £27 million in 2013. But according to Ms Daniel none of this increase was due to any transfer of assets to it from D2 as a principal. Given the size of D2's assets, any transfer of all or substantially all of those assets would have led to assets in D5 in the billions, and not in the millions. The same for corresponding liabilities.

Rather the amount of assets under its management increased, but that is a different matter. It is explained in the directors' report for the year ended 31 December 2012, to be found at 2/2/20/511. It is however common ground that in 2011 and 2012, D1 transferred the business carried on at its London branch to D5 pursuant to various agreements. The total value of the assets transferred was some £34,000, and US$9,000. Moreover, the business at the London branch constituted only a small part of D1's overall assets according to Ms Daniel.

Most of the employees of D1 and D2 were, following the crash, made redundant. Out of 111 employees at D1's London branch, 24 were transferred to D5 and they occupy senior positions. However, (a) I do not consider that these employees can be regarded as "assets", and (b) even if they were, I fail to see how they can by themselves or together with the transfer of the London branch business which was the subject of the agreements show or begin to show that D2 transferred all or substantially all of its business to D5. Indeed I do not consider that D1's own assets should be regarded as D2's assets for the purpose of clause 4.01(b) anyway. It is a separate legal entity. What D2 owned in relation to it were the shares in it. But they were not transferred to D5. However, even if one includes D1's assets as D2's, the transfer of employees and the London branch business (to the extent that it was transferred) cannot possibly amount to a sufficient transfer of D2's assets to D5, because of the clear disparity in the figures.

I therefore turn to D6. This is dealt with initially by Mr Balfan. At paragraphs 11 and 17 he said this:

In paragraph 16 he said that D2 had been winding down its business; it had not transferred all or substantially all of its assets to D6 as part of that process.

In paragraph 17 he said that D6 had some dealings with D2 in relation to certain of D2's derivative transactions as part of the wind-down. The derivatives portfolio of D6 consisted primarily of interest rate and currency derivatives, but there were legacy credit derivatives novated from D2. Specifically certain credit derivatives between third parties and D2 were novated in order to secure more favourable terms, but in each case D6 then entered into back-to-back transactions with D2 where the financial risk involved remained with D2. Under existing servicing arrangements between D6 and D2, D6 provided services with regard to D2's existing derivatives transactions. The example he gave earlier on was the hedging function which pre-existed the crash.

This was expanded upon by Ms Horne in her sixth WS. At paragraph 11.2 she said that in relation to the novation agreements D6 assumed derivatives which were either in an asset or a liability position and depending on which, D6 either paid to or received from D2 the full fair market value of the asset or liability. There was no net impact on the financial position of either D2 or D6. Then she refers to the back-to-back arrangement.

But at paragraph 11.4 she said the pricing basis of the back-to-back transactions reflected fair market value of the ultimate derivatives.

The fact that some derivatives which had belonged to D2 were transferred to D6 in this way does not mean that D2 transferred all or substantially all of its assets to D6, and Mr Balfan expressly confirms that it did not.

One then looks at D6's own financial position. Like D2, D6 does not now produce standalone accounts but it retains computerised information from which headline figures can be produced. One such set of figures was produced and it is to be found at 3/33/1044. Looking at this document, there is one line which says on the asset section "Unrealised gain on swaps options and forwards third party". There is a corresponding liability line. As against that line there is US$208 million as at the end of 2012, US$53 at the end of 2013, and US$97 at the end of 2014.

The corresponding liability figures are US$400, US$228 and US$248. I am told that the hedging contracts for D2 and the additional derivatives taken from D2 into D5 all form part of the figures against that line where the present position on the asset side is $97 million. But not all of those figures are attributable to D2 contracts alone.

However, the size of such assets and liabilities is very small compared to D2's assets and liabilities. Indeed D6's total assets, ignoring liabilities, come to something just over $1 billion. As Mr Balfan explains in paragraphs 12 to 13 of his WSs, such assets held by D6 are not substantial relative to the balance sheet of D2, which is obvious. He also states through Ms Horne's sixth WS that the values attributed to the derivatives are fair market value.

D6 had no obligation to produce standalone accounts or audited accounts, and while the computerised information reflected in this document does not follow GAAP rules, there is no reason to disbelieve it or Mr Balfan's evidence here. Mr Balfan has added that the figures for D6 are calculated on the same basis as for D2.

In addition, it is correct to say, as shown for example at page 152 of D6's Form 10-K for 2011, reference 22/22741, that D2 stopped doing one ancillary part of its business which was to act as an intermediary between AIG subsidiaries and third parties, which is distinct from its activities as a proprietary dealer, and that intermediate role has now been assumed by D6. This was due to the wind-down of D2's activities. But this does not entail a transfer of assets as such and in any event one is still left with the comparison between the assets and liabilities position of D6 as against that of D2.

Reliance is also placed upon a statement which appears at paragraph 39 of Ms Lucas' third WS, that the claimants believe that the business in which they were employed is now carried on by D5 and/or D6, but that very generalised statement takes the matter a little further. The question is the particular one of the transfer of all or substantially all of D2's assets and the evidence relating to that.

It is also said in the last part of paragraph 39, that the claimants believe that D2 has only retained those complex assets which it cannot move, and that this is uncontradicted; effectively, therefore, all such assets should be ignored when deciding if there has been the relevant transfer. But there is no basis for that construction at all even if the assets remaining - and they are extensive, running into billions - cannot be transferred, as to which there is no real evidence anyway.

At the end of the day in my judgment the comparative numbers speak for themselves.

Mr Leiper also takes the point that one might expect to see other assets in the document at page 1044, for example office, office equipment, etc, whereas there appear to be none against the line "other assets". I see that, but (a) one would imagine any such assets to be relatively small compared to the other figures here, and (b) there is no evidence that D2 ever transferred such assets to D6.

In conclusion, therefore, on the materials before me, it is plain that there was no transfer by D2 of all or substantially all of its assets to D5 or D6 or, if this were possible within the transfer provisions, to both combined.

I accept that in some cases under Part 24 a claimant might establish a real prospect of success by showing that reasonable grounds existed for the belief that a further investigation into the facts would add to or alter the evidence available to the trial judge and so affect the outcome, see Doncaster Pharmaceuticals v Bolton Pharmaceuticals [2007] FSR 63 at paragraph 15. This is not in my judgment such a case.

Accordingly, if it were necessary to consider the claimants' so-called alternative plea against D5 and D6 at all, it would have to be dismissed in any event.

I should add one footnote. In his submissions Mr Hunter argued that in relation to the claim against D6 the claimants in fact needed to show a good arguable case on the merits, since the same contractual points were relied upon in order to pass through the appropriate gateways for service out. Mr Leiper retorted that at least one of the gateways, necessary or proper party, did not depend on the point at issue. I do not consider it necessary to pronounce upon this debate because, as appears from what I have already found, Mr Hunter in any event was prepared to proceed on the basis of serious issue to be tried, which approximates to real prospect of success, and not set any higher standard in relation to the cases against both D5 and D6 albeit the burden is allocated differently in each case.

Asclarified in argument, the claimants' short point now is this (having abandoned various other contentions as to how D4 may be liable to pay under the plans): the definition at the beginning of the document constituting the DCP reads, and I repeat it:

Mr Leiper contends that the proviso "where applicable" governs D2's subsidiaries, but not D4 and its subsidiaries. Ergo any reference in the document and in particular 4.01 which refers to AIG Financial Products Corp or AIGFP necessarily and at all times includes D4. So when clause 4.01 at the beginning states "AIGFP's liabilities", that is a liability of D4 as well. It is said that this contention is fortified by reference to D4's losses as distinct from D2's losses in 4.01(b). Thus D4 is jointly and severally liable with D2.

In my judgment this is a hopeless contention. As a matter of construction I see no basis, linguistic or otherwise, for construing the opening words as Mr Leiper suggests. The presence of a comma after the words "all subsidiaries thereof" does not mean that the proviso does not govern what comes later. That is reading far too much into a comma. Moreover, no reason has been advanced as to why objectively the parties would have intended this result. Accordingly Mr Leiper's claimed interpretation is unarguable.

That being so, it is necessary to look at the context to see whether, despite this, D4 should be read as included within D2 ie whether such inclusion is “applicable”. In the context of the payment obligations, which I have read, the words make plain that this is a liability of D2 specifically and no one else. See the references to its liability as unsecured, and its general funds. The fact that later on D4's losses can be taken into account does not alter who is liable in my view.

Appendix B, which sets out the form of the deferred compensation statement, which is mandated by clause 4.07, also makes this plain. The statement says:

I regret to say, therefore, that this latest attempt to bring D4 into the firing line, as it were, must fail and D4's application for summary judgment succeeds so that that claim against D4 must be dismissed.

Finally I turn to joinder. The claimants apply to join an additional four claimants, (“the new claimants”), all of whom worked for D1, although one of them, Mr Robinson, transferred to D5. The application for joinder was made on 15 May 2015. The claims of the new claimants are the same as those of the existing claimants.

AIG contends as follows:

The governing law of the plans is Connecticut law. It is not suggested that in general terms it differs materially from English law on limitation and it is common ground that the relevant period for claims of this kind is six years. It follows that if the relevant causes of action arose at any point prior to 15 May 2009, they were time-barred as at the date of the application, which AIG is content to accept is the relevant cut-off point for present purposes.

The court's general power to add a party is contained in CPR19.4. But because the issue of limitation has arisen one needs to turn to CPR19.5. This states that it applies to a change of parties after the end of a period of limitation. Subparagraph 2 says:

Subparagraph 3 says:

If the limitation period had expired the claimants do not suggest that the addition of the new claimants was necessary in the very narrow sense contemplated by CPR19.5, nor could they. In oral argument Mr Leiper for the claimants sought to argue that the joinder of the new claimants could be justified by bringing them within the different rubric of CPR 17.4(2) which applies where a party applies to amend his statement of case in one of the ways mentioned.

Subparagraph 2 says this:

Mr Leiper says that he can bring the new parties within that, on the basis that their claims arose out of the same or substantially the same facts by reference to the nature of the contracts, though not the identity of the employees, and the issues already pleaded. However, in my judgment that argument is misconceived. As its language clearly shows, CPR17.4 is concerned with a new claim which an existing party wishes to add to that party's existing case. It does not deal with new parties at all. Their position in limitation cases is governed exclusively by CPR19.5.

However, and in addition, the claimants argue that in fact limitation had not expired in relation to the new claimants by the 15 May 2015. So CPR19.5 is not engaged anyway. In relation to new claims by an existing party, in the well-known case of Welsh Development Agency v Redpath Dorman Long [1994] 1 WLR, 1409, the Court of Appeal held that:

The reason for that is obvious. It avoids there being any prejudice where the amendment is allowed and which carries then with it the principle of relation back to the commencement of the proceedings - yet the defendant establishes at trial that his limitation point in fact was well founded.

Mr Hunter QC for AIG submits that by analogy the same approach should be taken where the limitation issue arises in the context of the addition of new parties. I agree, and I did not understand Mr Leiper to contend otherwise. Accordingly the position is this. If there is no reasonably arguable case that the new claimants' claims are time-barred, then CPR19.5 does not govern, joinder is simply a matter for the discretion of the court, and there were no discretionary matters which were urged upon me to reject the joinder of these new claimants. If, however, there is a reasonable argument that the new claimants are time-barred then they cannot be joined and they must be left to issue fresh proceedings.

A useful starting point here is the Particulars of Claim. I begin at paragraph 28. 28.1 provides that in or around October the seventh defendant informed the claimants that D2 had in the last 13 months incurred large losses which exceeded the amount previously credited to the account balances. Then it says in 28.2:

The date of October 2008 is reflected in a letter sent to employees on 9 October from AIG and in particular it stated:

The date of 9 October is no doubt why the claim form was issued but not immediately served on a protective basis on 8 October 2014. That fact of course is not determinative as to when time actually started to run.

It is right to say that there is a brief statement of Connecticut law in paragraph 22 of Ms Horne's fifth WS. She says that she discussed the matter with a partner Patrick Shea, admitted to the Bar in Connecticut. He informed her that Connecticut had a six year statute of limitations. The negative balance claim asserted accrued as of 9 October when all parties were notified that losses would be applied to accounts and would result in negative balances. At that point the claimants had a right to bring suit for a claimed breach and the statute of limitations began to run. So limitation expired on October 9, 2014. There has been no response to this, though admittedly it is a short statement. But in any event, assuming Connecticut law is the same as English law in its essence, it is difficult to see why there should not have been an accrued cause of action at this stage for the reasons there given.

I then read paragraph 28.4 and 28.5. The former says that:

Then 28.5 says that in purported reliance on that treatment AIG failed to credit any returns or to make any payment or distribution in respect of the plans since a date unknown, pending disclosure, but believed to be around January 2009.

In that regard there is a document from AIG headed "Losses for the quarterly period ending 31 March 2009". This refers to clause 4.01 and says that:

And the negative balance is in the region of $10 million.

It seems that employees such as Mr Borek received that document or something similar by a letter dated 15 May 2009 saying:

However, the decision to create the negative balances was clearly taken earlier, given the correspondence referred to above. On the claimants' own pleaded case, thus far, the contention is clearly that by January 2009 the relevant defendants were in breach of contract.

It is not necessary to read any more of paragraph 28, but I then turn to paragraph 29, "Particulars of breach of contract". Subparagraph 1 says that:

Subparagraph 3 and 4 allege, and it must be in the alternative, a wrongful failure to establish a restoration plan in accordance with the terms of the plans so as to remedy the negative balances created, ie if the creation itself was not a breach.

Subparagraphs 5 and 6 plead a failure to make payments in accordance with the true entitlements and a renunciation of any obligation to do so and subparagraph 7 alleges a wrongful failure to provide information.

In my judgment the core allegation of breach is and must be the implementation of the scheme to set off at the outset, and it will have an impact for the future, on what would otherwise be the employees' positive balance, ie monies owed or to be owed by the trading losses. Such set-off which would turn them into negative balances.

Although AIG has not provided any further information in this regard, there is on any view a reasonable prospect of successfully arguing that all of this occurred before, indeed considerably before 15 May 2009. On that footing the correct course would be for the new claimants to commence fresh proceedings and not to be joined in this action.

However, in his skeleton argument and in the course of oral argument Mr Leiper suggested that there may be continuing breaches, for example the non-payment of monies owed in the years 2009 and beyond, and/or that a failure to restore could be regarded as an ongoing breach, as could a failure to provide information.

Allied to that point was the suggestion made by Mr Leiper at the hearing that if necessary the new claimants would be content to be joined on the basis that the claims they made would not be “related back” to the commencement of proceedings but only to 15 May 2015 when the application was made.

I can see that one might have been able to make an application back then, which said that permission was sought to join the new claimants to pursue such claims as arose on or after 15 May, but this would have to have been properly articulated and the particular claims identified with precision given the periods involved. Instead the suggestion is only made now, and somewhat on the hoof.

Moreover, the continuing breach arguments may not be as straightforward as Mr Leiper suggests, because if the negative balance was applied and created as it appears to have been at the outset, then it may well be said that this is when the damage was done; this is when the real breach occurred, even if its effects run-on for several years.

I note, as Mr Leiper did, the statement in paragraph 21 of Ms Horne's fifth WS. That said:

But I do not read that as meaning anything other than a willingness to see the new claimants joined once the matter has been considered but with no relation back at all. That is really no different from adopting the WDA approach, which is to refuse joinder and its usual consequences and instead require the new claimants to issue fresh proceedings now, a course which is open to them.

If Mr Leiper is right and there are continuing and actionable breaches going forward from beyond the first part of 2009, then they can all still be captured by such new proceedings. If he is right that even the main claim did not arise until now or shortly after now, that can be captured too.

In those circumstances in my judgment the application for joinder must fail and the new claimants must be left to fresh proceedings.