Commercial litigation: the rulings and reforms that changed practice

What changed in privilege?

The single most consequential development, and it reversed a rule that had stood since the nineteenth century.

The Privy Council brought an end to nearly 140 years of legal authority in Jardine Strategic Ltd v Oasis Investments II Master Fund Ltd (No 2) [2025] UKPC 34 by abolishing the Shareholder Rule. The ruling confirmed that companies are entitled to assert legal advice privilege against shareholders, aligning the law with the principle of separate legal personality and removing a long-standing exception to corporate privilege.

For practitioners the consequence is immediate. Advice given to a company is now protected from its own shareholders in the ordinary way, which changes disclosure expectations in shareholder disputes, unfair prejudice petitions and derivative claims.

What changed in contractual interpretation?

Two decisions, both reinforcing a strict approach to what the parties actually agreed.

Deemed fulfilment rejected. The Supreme Court unanimously held in King Crude Carriers SA v Ridgebury November LLC [2025] UKSC 39 that English law does not recognise the doctrine of deemed fulfilment of contractual conditions precedent. Where fulfilment is prevented by breach, the appropriate remedy lies in damages rather than a debt claim. The judgment reaffirmed a strict approach to contractual interpretation and formally rejected the long-debated Mackay v Dick principle.

The drafting implication is that a party wanting a debt remedy where a condition is frustrated by the other side needs to say so expressly, rather than rely on a doctrine the Supreme Court has now closed off.

Third-party enforcement confirmed. The High Court confirmed in HNW Lending Ltd v Lawrence [2025] EWHC 908 (Ch) that a non-party could enforce a £1.52 million loan under the Contracts (Rights of Third Parties) Act 1999. The decision underlined the significance of careful drafting in finance and security arrangements.

What changed in fraud and deceit?

Subconscious reliance can establish inducement. In Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025] UKPC 53, the Privy Council clarified that a claimant does not need to demonstrate conscious awareness of a misrepresentation to establish deceit. The Board held that inducement may be established where a misrepresentation influences conduct at a subconscious level, provided causation and resulting loss are proven. The decision departed from recent English authority and clarified the correct approach to reliance on deceit claims.

That lowers a practical evidential hurdle for claimants, who frequently struggle to show a specific representation was consciously in mind at the moment of the decision.

Fraud rejected, conduct criticised. In Athena Capital and others v Secretariat of State of the Holy See [2025] EWHC 355 (Comm), the Commercial Court upheld the validity of agreements arising from the Vatican’s 2018 purchase of a London property at 60 Sloane Avenue. The court rejected claims of fraud, dishonesty and conspiracy but declined to grant a declaration that the claimants had acted in good faith. Mr Justice Knowles concluded that aspects of the claimants’ conduct lacked frankness and fell short of acceptable standards, while confirming that the transaction itself remained lawful and enforceable.

The refusal to grant the good faith declaration is worth noting. Defeating a fraud allegation and obtaining judicial endorsement of your conduct are different outcomes, and a client expecting the second may be disappointed by the first.

What changed in cross-border enforcement?

ICSID awards cannot be assigned. The High Court ruled in Operafund Eco-Invest SICAV plc & Schwab Holding AG v Kingdom of Spain [2025] EWHC 2874 that arbitration awards issued under the ICSID regime and the Energy Charter Treaty cannot be assigned to third parties. Enforcement in England is restricted to the original investor, placing England at odds with approaches adopted in some other jurisdictions.

That has direct consequences for the award monetisation market, where assignment to a funder or purchaser is a common exit route.

Anti-suit injunction refused. In FH Holding Moscow Ltd v AO UniCredit Bank [2025] EWHC 3111 (Comm), the High Court declined to grant an anti-suit injunction in relation to foreclosure proceedings in Russia. The court held that the dispute fell within a separate mortgage agreement governed by Russian law and emphasised principles of comity and the parties’ contractual allocation of jurisdiction.

Where a transaction spans several agreements with different governing law clauses, the English court will look at which agreement the dispute actually falls under.

What changed in parent company liability?

In Município de Mariana v BHP Group (UK) Ltd [2025] EWHC 2935 (KB), the High Court found BHP liable under Brazilian law for the collapse of the Fundão tailings dam in 2015. The court held that BHP exercised sufficient control over its joint venture, Samarco, to give rise to liability. The assessment of damages remains outstanding, with potential exposure running into tens of billions of pounds.

The finding on control is the significant element. A parent or joint venture participant cannot rely on corporate structure alone where the evidence shows it exercised real control over the operation that caused the harm.

Enforcing English judgments abroad

The most significant cross-border development is not a judgment at all, and it fills the gap Brexit created.

On 1 July 2025 the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters came into force in the UK, extending to England and Wales. The UK signed in January 2024 and ratified in June 2024.

After the transition period ended on 31 December 2020, the Brussels Recast Regulation and the Lugano Convention ceased to apply to English judgments save in legacy cases, and the UK’s attempts to accede to Lugano in its own right have been unsuccessful. Enforcement fell back on the Hague Choice of Court Convention 2005, which covers only exclusive jurisdiction clauses, or on older statutory regimes and common law action on the judgment.

Hague 2019 is materially wider. It provides a uniform framework for recognition and enforcement where a judgment arises under a non-exclusive or asymmetric jurisdiction clause, and in a range of situations with no jurisdiction clause at all. Contracting states include all EU member states except Denmark, plus Ukraine, Uruguay, Albania and Montenegro, with further states expected to follow.

Two limits are worth holding. It governs recognition and enforcement, not the allocation of jurisdiction, so it does not replicate what Lugano provided. And it does not assist with interim relief, which remains a matter for local law in the enforcing state.

For drafting, a non-exclusive or asymmetric jurisdiction clause in favour of the English courts is now a considerably safer choice than it was, which reverses part of the post-Brexit argument for moving away from English jurisdiction.

Public access to court documents

This is the development already in force and already affecting live cases.

Practice Direction 51ZH, the Access to Public Domain Documents Pilot, was published on 20 October 2025 and came into force on 1 January 2026. It runs for two years to 31 December 2027, with a review after the first six months, and applies in the Commercial Court, the London Circuit Commercial Court of the King’s Bench Division, and the Financial List. If successful it may be extended to other courts.

The shift is in the starting point. Documents entering the public domain through a public hearing become accessible on payment of a small fee, with the onus on a party who says access should not be given. In theory non-parties gain no new rights, since they could always apply. In practice the difference between applying to court and paying a fee is substantial.

• In scope: documents entering the public domain via a hearing held in public, in both new and ongoing proceedings
• Out of scope: hearings held in private, applications made without notice, and matters where confidentiality or anonymisation orders already exist

The background is the Supreme Court’s decision in Cape Intermediate Holdings Ltd v Dring, which prompted the Civil Procedure Rule Committee to pursue wider access.

Litigation funding after PACCAR

In R (PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28, the Supreme Court held that litigation funding agreements are damages-based agreements where the funder’s return is a percentage of damages recovered. That rendered many agreements unenforceable for failure to comply with the Damages-Based Agreements Regulations 2013.

The Civil Justice Council published its final report on third-party litigation funding in June 2025, recommending reversal of PACCAR and light-touch regulation with enhanced judicial oversight.

On 17 December 2025 the government confirmed it accepts both primary recommendations. Legislation will clarify that funding agreements are not damages-based agreements, reversing PACCAR with prospective effect, and will provide for proportionate regulation. It will be introduced when parliamentary time allows, and the wider CJC recommendations will be considered separately.

Two points matter for advice. Prospective effect means historic agreements are not cured, so enforceability questions on existing arrangements remain live. And “when parliamentary time allows” is not a timetable.

The SRA has separately consulted on safeguards around litigation funding and consumer claims, which we covered in our reporting on proposed new safeguards for litigation funding.

Costs, security and proportionality

Funding reform sits within a costs environment that has tightened independently of PACCAR.

Fixed recoverable costs expanded in October 2023 to most claims up to £100,000, with an intermediate track assigning cases to complexity bands. In those cases recorded hours are largely irrelevant to what a winning party recovers, and the shortfall falls on the client. That has to be priced at the outset rather than discovered at assessment.

Costs budgeting continues to govern multi-track work, and the courts have shown willingness to intervene at scale. In the Pan-NOx litigation the court subjected costs and case management arrangements to close scrutiny and produced substantial reductions in the interests of proportionality.

Security for costs has become more prominent as funded claims proliferate. A defendant facing a claim backed by a third-party funder will consider whether security is available, and the funding arrangements themselves may become material to that argument.

Costs on interim applications are decided on their own merits rather than following the ultimate outcome, and partial success can produce a partial award.

ADR is no longer optional

The change most likely to be missed, because it altered the overriding objective itself rather than creating a new rule.

In Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 the Court of Appeal held that courts have power to stay proceedings for, or order parties to engage in, a non-court dispute resolution process. That reversed the settled reading of Halsey, under which judges could only encourage ADR and penalise unreasonable refusal in costs.

From 1 October 2024 the Civil Procedure (Amendment No. 3) Rules 2024 wrote Churchill into the code. CPR 1.1(2)(f) now includes promoting or using ADR within the overriding objective, CPR 3.1(2)(o) gives the express power to order it, and Parts 28, 29 and 44 follow through on directions and costs.

The practical consequence is that refusing to mediate is no longer a tactical choice carrying a costs risk. It is potentially a breach of a court order, and a party declining needs a reason it would be content to give the court.

Collective actions and group litigation

Marking a decade of the opt-out collective actions regime for competition damages claims, the government launched a call for evidence to assess its effectiveness. It closed on 14 October 2025, with any proposals for change expected to be subject to further consultation. The direction of travel in the Competition Appeal Tribunal has been described as moving from rapid expansion towards more disciplined consolidation.

Meanwhile the courts continue to manage group actions at unprecedented scale. The Pan-NOx vehicle emissions litigation, commonly called the Dieselgate proceedings, involves more than 1.6 million claimants and allegations concerning unlawful defeat devices used to manipulate vehicle emissions tests, against Mercedes-Benz Group, Ford, Nissan, Stellantis and others.

With liability and quantum trials listed, the court has subjected costs and case management arrangements to close scrutiny, producing substantial reductions in the interests of proportionality. Together with the BHP litigation above, it shows judicial willingness to manage cost and complexity actively rather than let scale dictate process.

Arbitration and disclosure reform

The Arbitration Act 2025 updates the Arbitration Act 1996. It establishes a default rule that the governing law of an arbitration agreement is the law of the seat unless the parties expressly agree otherwise, introduces a statutory power allowing tribunals to issue summary awards where a claim or defence has no real prospect of success, and narrows the scope of de novo jurisdiction challenges under section 67.

The drafting consequence is immediate: parties wanting a governing law other than that of the seat must say so expressly, and clauses drafted before the Act should be reviewed on that footing.

There is a strategic interaction with the transparency pilot. Arbitration is confidential and documents are not publicly filed, so where parties value privacy, PD 51ZH may make arbitration comparatively more attractive.

Disclosure is also under review. Six years on from the introduction of the disclosure pilot, the court has invited feedback on the operation of Practice Direction 57AD in the Business and Property Courts, covering the cost and size of document review exercises, whether cooperation has improved, and whether the regime remains appropriate given evolving use of AI in disclosure.

What to watch next

Four things will move the position again, and all four have identifiable trigger points.

• The PD 51ZH six-month review. The pilot was designed with a review after its first six months, which will indicate whether it extends beyond the Commercial Court, London Circuit Commercial Court and Financial List.
• Funding legislation. The PACCAR reversal and proportionate regulation await parliamentary time. Until a bill appears, historic agreements remain exposed and the shape of regulation is unknown.
• BHP quantum. Damages have not been assessed, and the assessment stage will produce authority on quantifying loss in large environmental group claims.
• Collective actions reform. The call for evidence closed on 14 October 2025, with further consultation expected before any change.

Beyond those, the PD 57AD disclosure feedback exercise may produce refinements to the Business and Property Courts regime, with the treatment of AI-assisted review the aspect most likely to change.

What this means for practice

The through-line across both halves is a judiciary holding parties to the instruments they created, and a procedural system moving towards transparency and proportionality.

• Revisit privilege assumptions in shareholder disputes. Jardine Strategic changes the starting position in the company’s favour.
• Advise on PD 51ZH in live cases. It reaches ongoing Commercial Court proceedings, and what is relied on at a public hearing may be read by a competitor, journalist or foreign litigant.
• Draft for the remedy you want. King Crude Carriers means a debt claim has to be constructed expressly where a condition precedent may be frustrated.
• Treat historic funding agreements as still exposed. The PACCAR reversal will be prospective only.
• Check which agreement governs. FH Holding turned on the dispute falling under a separate agreement with different governing law.
• Review arbitration clauses against the new default that seat law governs, and consider whether confidentiality now favours arbitration for particular clients.
• Do not assume an award is assignable. Operafund restricts ICSID enforcement in England to the original investor.
• Reconsider English jurisdiction clauses. Hague 2019 makes non-exclusive and asymmetric clauses in favour of the English courts materially safer than they were post-Brexit.
• Have a position on ADR before directions. With the power to order it now express, a refusal needs a reason you would give the court.
• Price fixed recoverable costs into the retainer conversation. The gap between recorded and recoverable falls on the client.

The wider procedural context matters alongside all of this. Fixed recoverable costs and the 2024 amendments embedding alternative dispute resolution in the overriding objective have changed the economics and the expectations of bringing a claim, as our guide to the Civil Procedure Rules sets out.