Is this the future?

  • Author : Peter McMaster
  • Date : June 2010
ABOUT THE AUTHOR: Peter McMaster QC is a Barrister at Serle Court. He advised JP Morgan at the hearing of the trial referred to in this article.

The dispute among members of the Alhamrani family and between them and their corporate trustees spawned litigation before Jersey’s Royal Court that defies hyperbole. Alhamrani v Alhamrani was extreme litigation in every sense of the word. To appreciate the tenacity and determination with which it was fought, one has only to look at the way it began: at the pleadings. Experienced litigators would wrap cold towels around their heads before embarking on analyses of the pleadings, which were labyrinthine. They extended as far as a surrejoinder – an exotic pleading rarely encountered outside legal text books.

The pleadings were an early indicator of the degree to which the case was elaborated in a quest to leave no stone unturned in the quest for victory. At the trial witnesses came from all over the world to testify to the Royal Court, accusations of dishonesty were put to witness after witness. The documents in the case were contained in trial bundles that numbered hundreds of lever arch files.

The trial never reached a conclusion, but the Royal Court nevertheless sat for over one hundred days hearing evidence and submissions. The legal teams comprised Jersey Advocates and counsel and solicitors from London and elsewhere. To accommodate this collection of legal talent and the library of documents that made up the trial bundles, the court initially sat in a specially created temporary court room in a hotel. There were two trips to the Court of Appeal during the course of the trial itself. Unsurprisingly, Alhamrani is reputedly the most expensive piece of litigation ever conducted in Jersey.

The case naturally prompts the questions, was this proportionate, why did the case turn out like this, can this complexity be avoided and does it represent the future of trust litigation?

As any litigator knows, cases like this cost millions. Large though the sums at issue were, few would defend as proportionate the court time and human resources thrown into the case.

So why did it happen? The answer lies in the attributes and attitudes of some of the parties. Many of the parties in this case had deep pockets, the litigation pitched siblings against one another from a once united family, which had fallen prey to rancorous divisions. Strong feelings made the parties determined. Deep pockets gave them the resources to take and fight every point. Jersey litigation follows the English model in this respect: it is an adversarial system where the issues are determined by the parties; because the litigation is driven by the issues and the issues are defined by the parties, the court generally has no choice but to investigate and then rule on the issues raised by the parties. As the elaborate pleadings mentioned above attest, Alhamrani was a no stone unturned case, with predictable consequences.

The lesson of Alhamrani is that unless parties take a pragmatic approach to trust disputes, identifying the issues that really matter and sticking to them, they will become ensnared in an expensive legal campaign entirely of their own making, which is disproportionate to the real dispute.

Is Alhamrani a harbinger of the shape of trust disputes to come? The answer is a qualified ‘no.’ Litigation like Alhamrani is the product of its own particular circumstances, which produced a case that was fought with rare determination and tenacity. The result was a case that was replete with difficult factual and legal issues, demanding exceptional legal resources.

Although the combination of circumstances that went to make Alhamrani such an exceptional case was unusual, it is not unique in the world of offshore trusts and Alhamrani will probably not be the last case of its kind. Trusts in stable offshore jurisdictions with favourable fiscal climates will continue to figure highly among arrangements used by high-net-worth and ultra-high-net-worth individuals to safeguard their assets. The number of such individuals has been growing steadily and as global wealth increases is likely to continue growing. Experience suggests that the Alhamrani family is unlikely to be the last wealthy family with offshore assets to be riven by bitter conflict among its members.


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