Jersey Unreported Judgments

Breach

[2023]JRC101

Royal Court

(Samedi)

22 June 2023

Before     :

Sir William Bailhache, Commissioner, and Jurats Hughes and Ramsden

 

Advocate I. C. Jones for the Representor.

Advocates M. St J. O'Connell and S. A. Hurry for the Respondents.

judgment

the COMMISSIONER:

1.        The Court reserved judgment on hearing an application by the Representor for relief preventing Golden Sphinx Limited (the "Company"), now subject to a creditors' winding up, from instructing Advocate Jeremy Garrood and removing the Respondents from their appointment as joint liquidators.

2.        On 3 May, the Bailiff's Office sent to the Advocates a draft judgment with a covering email in these terms:

"Dear Advocates

I now enclose a draft of the judgment in the above case.

You are provided with the current draft of the judgment in PDF format to review.  Also attached is a word copy in order for you to mark up, in colour, any amendments.  

It is supplied on the usual terms and, for the avoidance of doubt, these are as follows:-

1. The judgment remains a draft judgment until formally handed down. It follows that the Court may make any changes which it wishes prior to the formal handing down.

2. The draft judgment is confidential. It may be shown, in confidence, to the parties and other legal advisers but only for the purpose of obtaining instructions and on the strict understanding that the judgment, or its effect, is not to be disclosed to any other person.

3. Because the judgment is a draft, and may be amended, the parties may not rely upon it for any purpose until it is formally handed down.

The primary purpose of supplying the judgment in draft is to enable the parties to consider the judgment and decide what consequential orders, if any, they seek.

A secondary purpose is to enable the parties to submit suggestions to the Court about typing errors, factual errors, wrong references and other minor corrections of that kind. You are requested to submit these in writing (or by e-mail) to me, not later than 5pm on Friday 5th May 2022. If you have no comments, you should confirm this by the same deadline. Once all comments have been received, the Court will make any amendments necessary before distributing final approved versions of the judgment and it is that version only which may be relied upon and disclosed to others."

3.        The draft judgment, both in PDF and Word format, had a watermark stamp on the first page of 'Draft'.  It was also only partially dated, as April 2023.

4.        On 4 May, Advocate Jones responded to the Bailiff's Chambers to indicate that he had no comments to make on the draft judgment.  On 5 May, Messrs Collas Crill emailed the Bailiff's Chambers to return a Word copy of the draft judgment with some minor suggested corrections for the Court's consideration.  Also attached to that email was a letter in relation to the draft judgment which the Bailiff's Chambers were requested to put before the Court for its consideration.  The judgment was handed down on 23 May 2023 with the minor corrections made to it and a postscript commencing at paragraph 50 of the judgment dealing with the letter received from Messrs Collas Crill and explaining why the Court was not minded to make any substantive changes to the draft which had been circulated.

5.        Prior to the handing down hearing, Advocate Hurry had drawn to our attention that in apparent breach of the embargo, the Representor had through his lawyers filed a status report in the US Bankruptcy Court Central District of California, Los Angeles Division, Case No. 2:22-BK-14320-NB on 16 May 2023.  In that status report, the Representor exhibited and referred to the draft judgment, also commenting within it that "It appears that the joint liquidators will be removed".  The Representors informed us that they understood the status report was filed as a public document to which the public has access.

6.        Later the same day, Advocate Jones informed the Bailiff's Chambers that he had now been able to take instructions and he confirmed that Advocate Hurry was correct in his understanding that within the status report the draft judgment of the Royal Court had been included and referred to.  There was no dispute that this was in breach of the instructions set out in the email from the Bailiff's Chambers attaching the draft judgment.  He was instructed to offer an unreserved apology to the Court on behalf of the Representor and his US legal advisers.  No discourtesy or disrespect was intended at any stage by either the Representor or any part of his legal team.

7.        The rest of Advocate Jones' email does not maintain the same tone, containing as it does a denial that there had been any advantage sought or obtained from providing the draft judgment to the US Bankruptcy Court, as the Representor's "legal advisers have simply sought to update the US Court as to the developments to date in the Jersey action which was a main purpose of the status report".  Advocate Jones went on to indicate that it would have been open to the Respondents to seek permission to share the draft judgment with the US Bankruptcy Court but they had failed to do so.  It was respectfully suggested that:

"It would arguably seem a somewhat farcical position for the US Bankruptcy Court not to be told about the draft judgment and its content by the liquidators as a part and parcel of the updating process, particularly when one considers the alternative which is to tell the US Bankruptcy Court that there is no update (which would not be true) which is seemingly the liquidator's preferred approach."

8.        Before handing down the judgment on 23 May, I invited Advocate Jones to address us.  He accepted there had been a breach of the embargo and, as a change from his email, he accepted that the apology was given by him as well as by the US legal team.  He said that he had no idea how this had happened. 

9.        His reading of the embargo was that he could share the draft with the whole legal team and that was indeed necessary: it had been shared with his English solicitors as well.  He submitted that anyone who was in possession of the judgment had an individual and collective responsibility.  If this had to be laid at his door, then, "so be it and I will take it on the chin". 

10.      We were informed that Advocate Jones had been asked by the US lawyers if the judgment had been handed down as a status report had to be filed.  He told us that he had confirmed it had not been handed down.  In doing so he did not explicitly refer to the embargo, but the context was the US lawyers wanted to use the draft.  Our understanding that the US lawyer with responsibility for the steps taken in California was Mr Boris Treyzon, registered with the Bar of California and a member of ACTS Law, a California partnership.

11.      Advocate O'Connell said that the Respondents took great exception to the suggestion that they should have gone to the Court in California with a status report because the judgment in question did not finalise or determine that status.  It was wrong for the Representor's lawyers to say that the Respondents were likely to be removed.

12.      The Court directed Advocate Jones to provide for its review the exchange of emails relevant to the distribution of the draft judgment and passing between Advocate Jones' office and the American lawyers.  These emails were of course privileged and were not (and have not been) made available to the Respondents.  Given the admitted breach of the embargo, the Court reserved judgment.  The present judgment contains our views and decision on what has taken place.

13.      Although the language used to send out the confidential draft judgment seeking comments from the parties is different in Jersey from that used in England and Wales, there is certainly a similarity to it.  In those circumstances it is interesting to note two recent decisions of the Court of Appeal in England and Wales.  The first concerned the case of R (Counsel General for Wales) v Secretary of State for Business, Energy and Industrial Strategy [2022] EWCA Civ 181, which resulted in a practice note issued by the Court of Appeal consisting of the Master of the Rolls Sir Geoffrey Vos, sitting with Nicola Davies and Dingemans LJJ.  The facts in that case similarly concern the violation of an embargo on the publication or disclosure of the contents of an approved judgment provided in confidence to the parties and their counsel and solicitors.  The draft had been sent to two barristers who practice from Matrix Chambers with a communication which said this:

"This draft is confidential to the parties and to their legal representatives.  Neither the draft nor its substance may be disclosed to any other person or made public in any way.  The parties must take all reasonable steps to ensure that it is kept confidential.  No action is to be taken (other than internally) in response to the draft before judgment has been handed down in Court.  A breach of any of these obligations may be treated as a contempt of Court."

14.      The header to the draft judgment included a statement in substantially similar form, save that it said expressly that the practice direction supplementing CPR Pt 40 applied to the draft judgment.

15.      In breach of the embargo, Matrix Chambers put out a press release in relation to the judgment due to be handed down.  The text that was posted online described how the Court of Appeal had dismissed the appeal of the Counsel General for Wales on the basis that the application was premature and should be tied to a specific piece of Senedd legislation, and the Counsel General was seeking permission to appeal to the Supreme Court.  The press release then went on to name the counsel who had represented the counsel general.  It is noteworthy that the draft judgment was not included with the press release and had not been released before it was handed down.

16.      The senior practice manager in Matrix apologised profusely to the Court for the mistake and indicated that steps would be taken internally to make sure the error would never be repeated.  Counsel would be available to make apologies in person to the Court.

17.      Notwithstanding the profuse apology, the Court did not consider the explanation that the violation had been "due to a miscommunication within Chambers" adequate and Davies LJ sought written explanations on a number of points.  Subsequently there was a hearing attended by the two barristers in person who gave further explanations and their renewed apologies - as to what had gone wrong.  The senior counsel involved explained that she did not pick up, as she admitted she should have done, that the marketing assistant in their chambers had not understood that the date of hand down was a day later than it actually was.  Because the barrister was working under pressure of time to get submissions to the Court, she read and responded to the marketing assistant's email too quickly.  Sir Geoffrey Vos MR said:

"The fact that busy barristers missed each of the four opportunities to avert a violation of the embargo highlights the need for Chambers to operate far tighter systems if further such breaches are to be avoided in future"

18.      The Court of Appeal reviewed the decision of the Appeal Panel of the Supreme Court in AG v Crosland [2022] 1 WR 367.  The majority of the Appeal Panel in that case held that the restriction contained in the embargo engaged Article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms, but it was necessary and proportionate:

"Furthermore, it [the embargo] was for the specific purposes of enabling the parties to make suggestions for the correction of errors, prepare submissions on consequential matters and to prepare themselves for the publication of the judgment.  It is important that the published text of a judgment of the Court should be accurate, complete and in its final form.  This restriction was clearly necessary in order to achieve the legitimate objective of maintaining authority of the judiciary and judicial decisions and was a proportionate means of achieving that result."

19.      Those comments apply as much in this case as they did in that one.  In the practice note which he issued, the Master of the Rolls said this at paragraphs 21 to 23:

"21.  I should say that I have called this case into Court because, amongst other reasons, the breaches that occurred here are not alone.  I have become aware formally and informally of other breaches in other cases.  It seems, anecdotally at least, that violations of the embargo on publicising either the content or the substance of draft judgments are becoming more frequent.  The purpose of this judgment is not to castigate those whose inadvertent oversights gave rise to the breaches in this case, but to send a clear message to all those who receive embargoed judgments in advance of hand down that the embargo must be respected.  In future, those who break embargos can expect to find themselves the subject of contempt proceedings as para 2.8 of CPR PD 40E envisages.

22.  I want also to draw attention to the terms of paragraph 2.4 of the CPR PD 40E which provides that a copy of the draft judgment may be supplied, in confidence, to the parties provided that '(a) neither the draft judgment nor its substance is disclosed to any other person or used in the public domain' and '(b) no action is taken (other than internally) in response to the draft judgment, before the judgment is handed down'.

23.  The persons to whom the judgment is normally (unless specific protections are provided for) supplied are counsel, the solicitors working on the case, and the parties themselves (whether individuals or corporate).  Para 2.5 of CPR PD 40E envisages that a party's legal representatives may supply a copy to the party to the claim in electronic form, not that it can be circulated elsewhere.  If the party is a partnership, company, government department, local authority or other organisation of a similar nature, para 2.6 of CPR PD 40E provides expressly that 'additional copies may be distributed in confidence within the organisation, provided that all reasonable steps are taken to preserve its confidential nature and the requirements of paragraph 2.4 are adhered to'.  That is not a licence to circulate the draft judgment beyond those who need to see it for the purposes for which it has been distributed in draft." [Emphasis added]

20.      The purposes for which the draft judgment is circulated in the England and Wales are the same as those for which it is circulated here in Jersey - to enable the parties to make suggestions for the correction of errors, prepare submissions and agree orders on consequential matters and to prepare themselves for the publication of the judgment.  As the Master of the Rolls said, the process is not for any other purpose and unless the Court expressly gives its consent, the use for any other purpose is forbidden.

21.      The Master of the Rolls then pointed to a number of specific errors:

(i)        It was not appropriate for persons in the clerk's rooms or offices of chambers to be given a summary of the contents of the draft judgment;

(ii)       drafting press releases to publicise chambers is not a legitimate activity to undertake within the embargo;

(iii)      too many people in Matrix Chambers in that case seemed to have had access to the summary contained in the press release;

(iv)      the measures taken by Matrix to protect the confidentiality of the draft judgment and its contents were lax - the barristers either did not read or did not properly read emails they were sent, and no proper precautions or double-checks were in place to ensure that one employee's error came to attention.

22.      The Master of the Rolls summarised in this way:

"29.  ...It is the personal responsibility of counsel and solicitors instructed in a case in which an embargoed draft judgment is provided to ensure that they are complied with.  The purpose of the process is to enable the parties to make suggestions for the correction of errors, prepare submissions and agree orders on consequential matters and to prepare themselves for the publication of the judgment.

30.  .....The consequences of a breach of the embargo can be serious.  It is not possible to generalise about the possible consequences as judgments will range, for example, from dealing with highly personal information in some cases to price sensitive information in others.  The Court is rightly concerned to ensure that its judgments are only released into the public domain at an appropriate juncture and in an appropriate manner."

23.      The second judgment from the Court of Appeal of England and Wales is that of the Public Institution for Social Security v Banque Pictet & CIE SA and Others [2022] EWCA Civ 368. 

24.      The facts in that case were that the date and time for hand down of the draft judgment was put back by twenty-four hours from that which had first been intended; but in fact there were a number of screenshots of material posted on the social media website Twitter from around 7.30am UK time on the day judgment was to be handed down, approximately three hours in advance of that taking place.  The Court made a full inquiry as to how this had occurred.  The tweets revealed that there was a breach (or breaches) of the embargo which were very serious in what was a high profile and high value case involving allegations of fraud on the part of multiple individuals and organisations.  However, despite inquiries, the Court was unable to determine who had committed the breach or breaches which it regarded as the most serious. 

25.      One breach of the embargo - not linked to the damaging Twitter breaches - was by the leader of the team of solicitors with conduct of the litigation on behalf of one of the parties.  At about 10.15pm, a WhatsApp message to five senior equity partners in the firm, a group used for confidential messages between senior partners, was sent by him:

"In other news we have just won in the CA on the Pictet case.  Huge jurisdictional victory. [F] dealt so he is good on [redacted] to become fully involved."

26.      The solicitor in question made an unreserved apology to the Court and expressed deep regret for the situation that had arisen.  He took a number of steps to undo the damage which could have been caused by his breach of the embargo and in those circumstances, and recognising that the judgment of the Master of the Rolls referred to above was not available at the time, the Court considered it was unnecessary for further steps, apart from publishing the then present judgment, to be taken.  The Court concluded:

"18.  The facts of this matter confirm the anecdotal information to which the Master of the Rolls referred in CGW at [21], namely that violations of Court embargos on publicising either the content or the substance of draft judgments has been becoming more frequent.  All recipients need to understand clearly:

           (i)         the importance and breadth of such embargos.  They are orders of the Court which prohibit communication for any purpose other than the legitimate exercise of making suggestions for the correction of errors, preparing submissions, agreeing orders on consequential matters and preparation for the publication of the judgment.  Informing other lawyers within the same organisation who are not involved in the conduct of the litigation and whose input is not necessary for the purpose of carrying out these legitimate exercises will be a breach of the Court's order;

           (ii)        the need for utmost care in communicating the content or substance of a draft judgment in the digital age.  The use of electronic messaging requires greater, not lesser, attention to detail so as to ensure that errors of the type that occurred in this instance are not repeated;

           (iii)       any breach of an embargo must be drawn to the Court's attention as soon as it is identified."

Discussion

27.      It is not clear whether the breaches of embargo are becoming more common in Jersey as, anecdotally, it appears they have been in England and Wales, but we would be surprised if the breaches did not happen with more regularity than should be the case.  In saying that we acknowledge immediately that there may be improvements to be made to our own practice in the Royal Court.  We think that the standard language which accompanies the circulation of the draft judgment can possibly be improved and we will take steps to ensure this is addressed in early course.  In addition, it seems to us that it may be necessary to revise Practice Direction RC10/01 on the handing down of judgments.  That Practice Direction is not of itself inaccurate in any respect, but the consequences of a breach of the embargo could be set out in more detail, as well as the obligations on those who receive the draft judgment under embargo. 

28.      Having said all that, what has taken place in the instant case is quite unacceptable and a review of the email traffic between Advocate Jones and his American legal team makes that clear.

29.      The email exchanges show that Advocate Jones sent the draft judgment to the Representor and a number of American lawyers and also an English solicitor connected with the case.  The email contained Advocate Jones' views on what was likely to come next and it shows that he was, at the time of sending the draft judgment out to those who received it, working in a mediation in London so he had only been able to 'skim read it [the draft judgment]'.  He asked for comments within the timescale.  The email from the Bailiff's Chambers was however attached, so that the recipients can have had no doubt as to the purposes for which the draft judgment was supplied and the confidentiality which attached to it.  We are satisfied that at least one recipient understood this, because on 16 May, Mr Daniel McCarthy, one of those to whom the draft judgment was sent, requested of the Representor (strangely), and copied the other lawyers including Advocate Jones, whether the Court in Jersey had entered the proposed judgment 'to remove the liquidators yet', commenting that the status report was to be filed that day.  Advocate Jones responded to that email within six minutes in which he said that he had not had any update or response from the Court.  He asked what the filing deadline was, UK time, and he concluded:

"I will be able to get over to the Court after lunch and make some enquiries again.  I am not proposing I will learn anything but I am happy to try that way and see what information I can glean and what I can find out that you can use."

30.      That email was copied to Mr Boris Treyzon, another of the Representor's US lawyers. 

31.      Advocate Jones has also provided us with an affidavit sworn on 6 June.  In it he confirms that there is no suggestion that the embargo is unclear as to the status of the draft judgment.  There was equally no suggestion that the embargo is not specific in stating that the draft judgment cannot be disclosed to any other person.  When Advocate Jones circulated the draft judgment he did not explicitly draw to the attention of those receiving it the terms of the embargo - he said this was for two reasons.  The first was that he was engaged in a mediation in London and time was extremely limited, but he was naturally keen to circulate the draft judgment as some considerable time had passed since the hearing; and the second was that he assumed in providing the judgment under cover of the email from the Bailiff's Chambers the status of the embargo could not have been clearer.  In his affidavit, he says that it is unclear what the effect would have been if he had explicitly drawn to everyone's attention the terms of the embargo, but he agreed that he could have done so.

32.      There was a scheduled call on 4 May when the draft judgment was discussed and Advocate Jones confirms that he recollects discussing it and specifically its status - i.e., as matters stood, the parties could not rely on it and / or use it and would have to wait until the Court formally hands it down.  He recalled that he had specifically been asked when he expected the draft judgment to be finalised, i.e. at what point would the team be able to rely upon it, particularly because he understood there was an application or process pending in the United States which was focused on lifting a stay which had been imposed.  According to Advocate Jones, Mr Boris Treyzon is the lead lawyer for the Representor in the United States.

33.      Having referred to the email exchange with Mr McCarthy referred to above, Advocate Jones said that it did not occur to him that there was or could be any misunderstanding as to the status of the draft judgment.  It therefore came as a surprise to him to be informed by Advocate Hurry that the status report had been filed in the US Bankruptcy Court, which not only referred to the draft judgment but also exhibited it.  He took instructions and spoke with not only the Representor but also Mr Treyzon.  In the course of that call it was confirmed to him that what Advocate Hurry had said was correct and Mr Treyzon instructed Advocate Jones to respond directly to the Court with an apology for the breach of the embargo and the explanation with which the Court has been provided.

34.      Our understanding is that it was Mr Treyzon who took responsibility for the decision to file the status report appending the draft judgment and that he did not take that action on direct instructions from the Representor.  Advocate Jones understood from Mr Treyzon that the latter did not consider that filing the draft judgment would amount to a breach of the embargo on the basis that the draft judgment had a similar status to a 'tentative ruling' in the United States.

35.      In his affidavit, Advocate Jones refers to the lack of any certainty as to whether the breach of the embargo was calculated to create a litigation advantage.  The Respondents clearly consider that the breach of the embargo was deliberate and was calculated so to do; and one can see that if it is right that there is some application or process pending in which the question of the automatic stay, which was imposed on the proceedings commenced there by the Representor as a result of the liquidators' title being registered in the Californian Courts, being lifted, there must be at least the possibility of some litigation advantage being sought.  It does not appear to us that we can form any judgment on whether that is or is not the case, but we certainly do not consider that the suggestion is intrinsically incredible.

36.      Advocate Jones completes his affidavit by referring to the suggestion in Court on 23 May that he had not personally offered any apology.  He did not agree with that, but for the avoidance of doubt he confirmed his unreserved apology to the Court for the transgression.  Irrespective of the fact that he was unaware of the breach until it was brought to his attention and of the fact that had he known about it there was very little he could have done to prevent it, he was collectively responsible for the breach as one of the Representor's legal advisers.  Advocate Jones accepted that the embargo had been breached and as the Representor's representative before the Royal Court, it was obvious that he had to take responsibility for that breach and explain the circumstances as they were known to him.

37.      We have also been presented with an affidavit from Advocate Boris Treyzon of the California Bar, where he has practiced for over twenty-five years.  He had the opportunity of reviewing Advocate Jones' affidavit in draft and he took no issue with the detail or extent of the timeline which he set out.

38.      Mr McCarthy, referred to above, is representing the Representor in the United States bankruptcy proceedings.  Apparently he requested a status update on the proceedings in Jersey on 11 May, and in his affidavit, Mr Treyzon says that he was in error in providing a copy of the draft judgment to Mr McCarthy without the instructions for handling it, contained in the body of the email.  He said this was an inadvertent error for which he was responsible.

39.      Mr Treyzon confirmed that application had been made by Mr McCarthy to remove the offending draft judgment and seal from the public record by order of the Court pending a hearing on May 30 when the Bankruptcy Court did rule the status report that had the draft judgment attached would be permanently removed from the Court's records.  Mr Treyzon concluded by offering his 'sincere apologies for my actions.  These actions were not intended nor were carried out with an intent to violate this Court's instructions but were, instead, undertaken in error'.

Our conclusions

40.      We deal first with the information provided to us by Mr Treyzon and Advocate Jones.  We are appreciative of their respective apologies but the explanations which have been given by both lawyers raise difficult questions.  As far as the errors from Mr Treyzon is concerned, he admits to the error of neglecting to provide Mr McCarthy, who filed the status update, with a copy of the instructions for the handling of the draft judgment.  He asserts that the error was certainly inadvertent, albeit that it was his error.

41.      However, it is clear from the email from Advocate Jones sent on Wednesday 3 May at 8.56 UK time that he not only sent the draft of the judgment but also attached a copy of the email from the Bailiff's Office.  That was sent to, among others, Mr Treyzon and Mr McCarthy.  It would seem to be clear that Mr McCarthy must have been aware therefore of the embargo and its terms.  Furthermore, in Mr McCarthy's email of 16 May at 12.21 UK time, he refers to the status report which had to be filed that day and specifically asked whether the Court in Jersey had entered the proposed judgment: so he must have known that there was an issue about using the draft judgment in question.  If he were not so aware, it seems likely that he must have realised there was a difficulty when Advocate Jones responded to him six minutes later - dealing with the filing deadline - Advocate Jones had in mind calling at the Court office to see if he could learn anything, and then to advise 'what I can find out that you can use'.  We have not received any evidence directly from Mr McCarthy, and even if we had it seems to us that we would probably need to have not only his file but also have him appear personally in front of us.  Nonetheless, it does seem very hard on the face of it to accept the evidence of Mr Treyzon that Mr McCarthy took no action in violation of the embargo, nor was aware of it before it was brought to his attention - and of course, if that raises questions about the conduct of Mr McCarthy, it also raises questions about the conduct of Mr Treyzon by his execution of an incorrect affidavit.

42.      These two lawyers are beyond our reach and we do not think it would be right to hold the Representor accountable for any conduct of his US lawyers in breaching the embargo.  There is no evidence that he directed it, and even if he had done so, the breach was caused by the lawyers and not by him, and they should simply have refused to act in accordance with his instructions, if he gave them.

43.      In our view, this judgment should be made available to those responsible for discipline within the Californian Bar Association of which Mr Treyzon and Mr McCarthy are presumably members.  It will in our judgment be a matter for them to identify whether the standards of the California Bar Association have been breached deliberately or negligently and what, if any, consequences flow from such a conclusion, bearing in mind that it is the reputation of Californian lawyers which has been put at risk by what has taken place during these proceedings.  Whether Mr Treyzon and Mr McCarthy self-report or whether the report is made by the Respondents through their American lawyers is not a matter for us.

44.      We turn next to the position of Advocate Jones.  Although in his affidavit Advocate Jones indicated that he considered he had made a personal apology to the Court at the hearing on 23 May, our own view at the time was that this apology was something less than fulsome.  That view was formed not just because it was clear that he was offering the apology of the American lawyers, but also because he had sought in the email exchange prior to the Court hearing to suggest that the liquidators had themselves a duty to file a status report in the Californian Bankruptcy Court and should therefore have asked the Royal Court for permission to disclose the content of the draft judgment.  The concentration in Advocate Jones' fire power on the lack of any advantage gained by the breach also tended to suggest that the breach of the embargo was being minimised.  However, whatever view we might have formed on May 23, the subsequent apology given to the Court is unreserved and the accompanying analysis seems to us to be entirely right, as Advocate Jones put it in his affidavit, 'In the simplest of terms, an embargo of the Royal Court in relation to its own judgment has been imposed.  The embargo has been breached.  As Mr Itkin's representative before the Royal Court it is obvious that I have to take responsibility for that breach and explain the circumstances of it to the Court as they are known to me'. 

45.      What is slightly worrying about the affidavit which Mr Jones has sworn is the implication that it would not matter very much whether he had drawn the attention of this legal team outside the island to the terms of the embargo, because what they did was a matter for them and outside his control.  If that is true, then of course it is an additional reason why one hopes that the professional body responsible for discipline of those outside the island will take seriously this Court's complaints about the breach of the embargo, which amounts to a contempt of this Court.  We have indicated that we think that our own procedures could have been improved and no doubt that will take place - but as Advocate Jones said, and Mr Treyzon apparently accepts, there is no doubt about the breach of the embargo and no doubt that the embargo was known to exist, at least by some in the American team at the time it was breached.

46.      In passing, it is interesting to note the contents of the filing which Mr McCarthy made on 16 May:

"1.  On May 12 2023, Mr Itkin's counsel emailed counsel for the foreign representatives (Kyle Ortiz) [the Respondents] about filing a joint status report by May 16 2023 in connection with the May 30 2023 continued hearing on Mr Itkin's motions for relief from automatic stay.  Mr Ortiz promptly responded: 'We should probably file our own.  My understanding is we are still waiting on a decision on Itkin's removal motion in Jersey'.  Thus, Mr Itkins is submitting this report.

2.  The Royal Court of Jersey was critical of the joint liquidators for Golden Sphinx Limited ('debtor'), who are the debtors' foreign representatives before this Court.  A copy of the lodged proposed judgment of the Royal Court is attached hereto as exhibit A.  It has not yet been entered by the Court.  It appears that the joint liquidators will be removed."

47.      From this extract it is clear that the US counsel for the Respondents, whatever their state of knowledge as to the draft judgment, were not able to say that the decision had been given.  It is also surprising that Mr McCarthy felt able to summarise the terms of the judgment in the terms he did.  Indeed, it may therefore be the case that when Advocate Jones says that there was very little he could have done to prevent the breach, it may be that he was correct.  If anything, that goes to the extent to which he himself was able to place full trust in the US legal team, a matter again on which we express no view.

48.      However, Advocate Jones was right to say that there is no one else but him on his side of these proceedings who can carry responsibility for the breach of the embargo.  It was his direct responsibility as an officer of this Court to ensure that the breach did not happen.  We are not proposing to take any further action in this case, but we do not wish to understate the nature of that responsibility.  Its existence means that advocates of this Court who receive a copy of a draft judgment under embargo must be extremely careful about sharing it.  Of course the Court understands that in multi-jurisdictional litigation draft judgments are likely to be shared with other members of the team who are operating in other jurisdictions - if anything that emphasises the obligation on the Jersey advocate to ensure that all members of the team with whom he or she shares the draft judgment are fully aware of the terms of the embargo, and if there is not complete confidence that the embargo will be respected, then the draft judgment should not be shared unless the Court is specifically requested to give, and gives, its consent.  We cannot be clearer than that because ultimately the responsibility for the breach of embargo rests with the Jersey advocate.

49.      In this case, it is apparent that when sharing the draft judgment, although the email from the Bailiff's Office was attached, no emphasis was given to the embargo on which it was sent.  It should have been.  Whether all members of the team had seen judgments previously and were aware of the terms upon which draft judgments were sent out or not, it should be routine that the existence of the embargo is drawn to the attention of anyone with whom the draft judgment is shared.

50.      Furthermore, the question from Mr McCarthy on 16 May should have prompted immediate concern on the part of Advocate Jones about the possible breach of embargo.  His answer by email that day was an offer of help but it did not amount to a warning that the draft judgment was not to be mentioned or exhibited.  It seems to us that Advocate Jones was probably put on notice of a potential breach and probably recognised that given the speed of his response; but he was not clear enough in his response that the embargo was to be respected.

51.      We have suggested to the Bailiff that the Practice Direction in connection with the circulation of draft judgments should be updated and no doubt there will be some consultation with the profession in that respect.  In the meantime, the proforma embargo issued by the Bailiff's Chambers will also be reviewed.

Authorities

R (Counsel General for Wales) v Secretary of State for Business, Energy and Industrial Strategy [2022] EWCA Civ 181. 

AG v Crosland [2022] 1 WR 367. 

Public Institution for Social Security v Banque Pictet & CIE SA and Others [2022] EWCA Civ 368