Courts need good reason to stay

The High Court has indicated that it will take a rigorous approach to any application for a stay, in a high stakes financial case.

FCA v Avacade Ltd and Others [2019] EWHC 1961 (Ch) concerned civil proceedings brought by the Financial Conduct Authority (FCA) against Avacade for alleged regulatory breaches while advising on pensions. A 19-day trial had been listed for January 2020. However, two defendants, Craig and Lee Lummis, sought a four-month stay on the grounds of stress brought on by this and other litigation. They submitted reports from a psychiatrist and general practitioner.

Judge Pelling QC refused to grant a stay.

In a LexisNexis news analysis piece published last week, LexisPSL panellist Sandip Patel QC said Pelling J’s reasons were that a four-month stay would almost certainly require the trial to be postponed until December 2020, the stresses associated with litigation were commonplace and would simply recur on an adjourned hearing. Moreover, the judge said the medical evidence was ‘weak’, ‘skeletal’ and lacked sufficient evidence of diagnosis and prognosis. Finally, the medical evidence was just one factor in the overall exercise of discretion and the FCA should not be prevented from pursuing the proceedings in the public interest. That benefit should be made available as soon as practicable, and so long as that was fair to the applicants.

Patel, a partner at Scarmans, said: ‘The judgment is a cautionary reminder to practitioners, if one was needed, that an application for a stay unsupported by cogent evidence and sound reasons is doomed from the outset.

‘The judgment also provides helpful and specific guidance on the nature and scope of medical evidence required in support of a stay for ill health. The court highlighted that such evidence must be of sufficient quality and clarity, and should not be in the form of broad and unsubstantiated suggestions.’