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Only Claims with No Real Prospect of Success Do Not Merit a Full Hearing

Judges are bent on giving every case fair consideration and only very sparingly use their powers to strike out unmeritorious claims without a full hearing. That point was clearly made by one case in which a businessman claimed that a bank had lured him into becoming involved in a failed property transaction.

The businessman alleged that he had been induced to participate in raising finance for the transaction by false representations made by one of the bank’s employees. He claimed to have forfeited a Euros 8.25 million deposit and suffered other substantial losses when the deal fell through. It was also claimed that the bank had failed to honour the terms of a guarantee.

The bank applied to strike out his claim, or to have summary judgment entered in its favour, on the basis that he faced insurmountable hurdles in proving his case. It was said, amongst other things, that there was no evidence that the deposit had in fact been paid or that there was any contractual basis for its forfeiture. On the basis of evidence thus far disclosed, the bank argued that his claim was doomed to fail.

The High Court noted that the bank had several times tried to get the businessman to disclose documents and to state his case with clarity. On the current state of the evidence, he faced undoubted difficulties and his claim was likely to fail. However, in rejecting the bank’s application, the Court was not prepared to find that his prospects of success were merely fanciful.

The Court noted that summary judgment is not granted because a claim will probably fail, but only where it has no real prospect of success. To dismiss the businessman’s claims as unworthy of belief would require the Court to engage in a mini-trial, a course which was strongly discouraged by the authorities.