When should open justice be curtailed? Russian oligarchs learn the answer

It is an important principle of civil justice that proceedings are ordinarily conducted in public in open Court.

Whilst the Court will deviate from this principle when necessary, it is not an insignificant burden to persuade them to do so, as a Russian oligarch has found out.

In Cherney v Deripaska1, Mr Deripaska (D) applied for the trial, which is scheduled to begin later this year, to be held in private when twelve of the witnesses he is intending to call give evidence and for anonymity orders to be made in relation to those witnesses and their evidence.   D sought to rely upon CPR rule 39.2(3) and (4) which set out various circumstances in which a hearing can be held other than in public.

At the heart of the defence to the proceedings are allegations by D that Mr Cherney (C) was connected with organised crime in Russia.  The witnesses D was intending to call would, it was said, give evidence on that issue and as a consequence they and their families would face an increased risk of personal harm as a consequence.  It was also said that without protection the witnesses were less likely to give full and frank evidence, which would impact on D's ability to defend himself at trial.

The Court was persuaded that, under the CPR provisions cited and the in accordance with the European Convention on Human Rights, it had the power to protect witnesses in the manner requested.  However, the Court declined to make the orders sought (save in respect of one witness in relation to which D was successful and a further witness in relation to which the position was reserved).  This was largely because although D had adduced evidence about the risks posed by organised crime to witnesses generally, D had failed to substantiate his assertion that the witnesses at this trial faced these risks.  D had also not adduced sufficient evidence to support his contention that the witnesses would be less likely to be open in their evidence if they gave evidence at a public hearing. Crucially, D had already served witness statements from the witnesses he was intending to call and the identities of the twelve to whom the application related were therefore, to some degree, already known.

What this judgment shows, other than that the English Commercial Court continues to be the second home to certain Russian oligarchs, is that any party seeking to have the Court deviate from the principle of public hearings has a very high threshold to cross.  Any application for a private hearing should articulate specific and identifiable risks rather than genetic concerns.  However, the trial is not scheduled to begin until late 2012 so there is likely to be more pre-trial skirmishing and possibly even an appeal.  Interestingly, the Judge specifically said that notwithstanding the orders he made, D's lawyers were right to bring the matters to his attention before the start of the trial and that the applications were properly made.

1. Michael Cherney v Oleg Vladimirovich Deripraska [2012] EWHC 1781 (Comm)