One of the potentially useful characteristics of ChatGPT is that I can upload document files to it, and ask it to analyse and summarise those files for me. The case of Deutsche Bank v Sebastian Holdings and Vik has been to the Court of Appeal (again) this month, and a copy of the judgment can be found here:
Deutsche Bank AG v Sebastian Holdings Inc, Alexander Vik [2024] EWCA Civ 245
I upload it and ask for a summary of the case in bulletpoints and get this:
Here’s a summary of the case Deutsche Bank AG v Sebastian Holdings Inc & Alexander Vik [2024] EWCA Civ 245:
- Context: The appeal concerned the interpretation of s. 24(2) of the Limitation Act 1980 regarding when time starts for limitation purposes on interest on costs following a court order for costs to be assessed.
- Background: In 2013, Deutsche Bank (DB) won a case against Sebastian Holdings Inc (SHI), with a judgment for around US$243m and an order for SHI to pay 85% of DB’s legal costs. The costs were to be detailedly assessed if not agreed. Cooke J also made an order that Alexander Vik was liable for the payment on account of costs as a non-party, which Vik challenged up to the Supreme Court and the European Court of Human Rights. The detailed assessment of costs commenced in 2017 and concluded in 2023, taking significantly longer than the trial itself.
- Legal Issue: The issue was whether interest on assessed costs became “due” at the date of the Costs Order in 2013, thus limiting DB’s ability to recover interest for part of the duration due to statutory limitation.
- High Court Decision: Dias J ruled that interest on costs became due on the date of the Costs Order, leading to DB being unable to recover approximately £775,000 in interest.
- Appeal Court Decision: The Court of Appeal, led by Lord Justice Popplewell, disagreed with the High Court’s interpretation, clarifying that “due” in s. 24(2) refers to when the interest liability is enforceable or payable, not when it accrues. This interpretation meant that DB was not precluded from recovering the interest in question.
- Outcome: The appeal was allowed, meaning DB could recover the full amount of interest on its legal costs from the date the costs were quantified in the Final Costs Certificate issued in May 2023.
The judgment emphasized the distinction between a debt being “due” and being “payable” and clarified the application of statutory limitation periods to interest on judgment debts, particularly in the context of legal costs.
That is promising: so I ask it to find 4 key quotes for me from the judgment:
Here are four key quotes from the Deutsche Bank AG v Sebastian Holdings Inc & Alexander Vik [2024] EWCA Civ 245 case:
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On the interpretation of “due” in s. 24(2): “I start with the ordinary meaning of the word “due” without resort to context. Each side submitted that its natural meaning favoured the construction for which it contended. Mr McLeod submitted that its natural meaning was payable. Mr Morris submitted that its natural meaning was owing” .
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On the importance of “arrears” in interpreting “due”: “The word “arrears” however is not neutral in the same way as “due” and its place in s. 24(2) supports DB’s construction. There are no “arrears” of an amount owing until it has become payable” .
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On policy considerations supporting the interpretation: “The English law on limitation of actions has been subjected to regular criticism for its uncertainty complexity and lack of coherence… One must therefore approach questions of policy as a guide to interpretation of statutes of limitations with a degree of caution” .
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Conclusion and decision: “For these reasons I would allow the appeal” .
These quotes encapsulate the court’s reasoning on the interpretation of the Limitation Act 1980 concerning when interest on costs becomes “due,” the distinction between a debt being “owing” versus “payable,” and the policy considerations influencing the court’s interpretation, culminating in the decision to allow the appeal.
However, that isn’t really testing the software. So I ask it to summarise the case in 500 words, in a way that a 12 year old can understand:
Imagine you and your friend had a deal to trade some of your toys. You gave your friend your favorite toy car, but your friend didn’t give you anything back, even though they promised. So, you ask a teacher (like a judge in court) to help. The teacher says your friend must give you 5 chocolates as a sorry gift for not keeping their promise. Also, for every day your friend delays in giving you the chocolates, they must add one more chocolate.
But your friend doesn’t listen and keeps delaying. So, you go back to the teacher to figure out how many extra chocolates your friend owes you now. This takes a long time to figure out because you and your friend argue about it a lot. Finally, after a lot of discussion, the teacher says exactly how many chocolates you should get.
In this story, Deutsche Bank (like you) was supposed to get money (like chocolates) from another company and a person named Mr. Vik (like your friend) because they didn’t keep a promise. The court (like the teacher) said how much money they should get. The court also said that for every day the payment was delayed, Deutsche Bank should get extra money, like interest.
But, figuring out the exact amount of money (like counting the chocolates) took a very long time because there were a lot of arguments about it. After many years, they finally agreed on how much money it should be. But there was a problem: There are rules that say you can’t ask for extra money (interest) if too much time has passed. In this case, the question was: When does the time start? Is it when the court first said Deutsche Bank should get the money, or is it later, when everyone agreed on the exact amount?
Deutsche Bank thought it was unfair to start counting the time from the very beginning because they couldn’t ask for the exact amount until everyone agreed on it much later. The lower court (like a stricter teacher) said the time started from the very beginning, so Deutsche Bank couldn’t get all the extra money they thought they should.
Deutsche Bank didn’t think this was fair, so they asked another group of judges (like going to the principal) to decide. These judges agreed with Deutsche Bank. They said it wouldn’t be fair to start counting the time so early because Deutsche Bank couldn’t do anything until the exact amount was decided. So, Deutsche Bank should be able to get more of the extra money they wanted because the counting should start later, when everyone finally agreed on how much was owed, not from the very beginning.
This was good news for Deutsche Bank because it meant they could get more of the extra money for the delay. It’s like saying you should get more chocolates not just from when your friend first broke the promise, but from when you finally agreed on how many extra chocolates they owed you for being so late.
Not bad!
And there we shall leave ChatGPT for a while, and return to the more usual themes of costs and litigation funding in the next post. In the meantime, I shall continue to explore the potential of this technology. But I hope you have found it fun, and have an inkling of how it will develop, and possibly develop very fast.