In FCA v Avacade Ltd and Others, the question before the English High Court was: Does the stress of complex litigation affecting the mental health of the defendants warrant a stay of proceedings?
The underlying proceedings concerned civil action being taken by the UK’s Financial Conduct Authority against Avacade for alleged regulatory breaches with regard to advising and managing pension funds. Judge Pelling QC dealt with the defendants’ application for a four-month stay of the proceedings on the grounds of stress brought on by this and other related litigation. In support of their application, the defendants submitted medical reports from a general practitioner and a consultant psychiatrist. In summary, the medical evidence stated that due to the ongoing litigation, the defendants suffered from poor sleeping, over-drinking, low mood, panic attacks, insomnia and that their ability for rational decision-making, to give evidence and provide instructions to their lawyers was likely impaired. The Court refused to grant to the stay on the grounds that:
- A four month stay would almost certainly result in the trial date being lost and it would also have the effect of denying the legitimate interest of the claimant to have its claim resolved in a timely manner and at a reasonable cost. The Court decided that both outcomes were not in the public’s interest and in accordance with the Overriding Objective.
- Equally important was the quality and clarity of the medical evidence provided by the defendants. The Judge described that the medical evidence as ‘skeletal’, lacking in any diagnosis, a clear course of treatment and likely prognosis. Counsel for the defendants accepted that the psychiatrist’s diagnosis of the third and fourth defendant of ‘severe adjustment disorder’ was not a recognised psychiatric condition but was simply another way of saying that the defendants were suffering from stress secondary to the conduct of litigation. Without a precise treatment plan, merely stating that the defendants would benefit from a period of four months “of complete respite with no communication with lawyers or the Court” was insufficient to persuade the Court that a stay would likely result in any improvement in the defendants’ impairments.
Mental health is a hot topic these days and litigation is rarely stress-free for the parties and their lawyers involved. However, an application for a stay of proceedings based on ill-health is doomed to fail if not supported by the medical evidence of sufficient quality and clarity.