'Not likely to be a common occurrence'

The headline to this piece is provided by Lord Justice Tuckey: they were the words he used after delivering his powerful, long-predicted, but nonetheless shocking judgment in Co-operative Wholesale Society vs International Computers Limited.

This £11m dispute began its life in the Technology and Construction Court, a specialist division of the High Court. TCC judges are renowned for their skill, judgment, patience, attention to detail and experience. They resolve some of the UK's most complex, thorny and valuable claims. This case arose after ICL agreed to develop software to integrate computers in CWS' stores. A most unlikely candidate for fireworks, headlines or "body counts", this case has nevertheless been generating them spectacularly for more than a year. Here is a potted history …

In late 2002, His Honour Judge Seymour, a TCC judge, decided after a 20-day trial that CWS' claims for misrepresentation and breach of a contract failed. There was no contract, and even if there were, ICL hadn't breached it, repudiated, or gained it by misrepresentation.

Judge Seymour didn't stop there, however. He made wide-ranging and damaging findings about the honesty of CWS' senior managers and witnesses, and the competence of its advisers. These findings hadn't been mooted, let alone argued for, by ICL. So, the first headline generated by the case was "Co-op loses £11m case as IT staff 'lie' in court". The judge spared none the blade – even those who prepared the bundles! Not even a coded warning of the potential findings was given until the reserved judgment was detonated.

CWS immediately claimed Judge Seymour's approach was unfair and tainted the whole judgment. Their appeal was given leave, and, in late December 2003, it was decided.

Lord Justice Tuckey reminded the parties in Cairnstores Limited vs Hassle [2002], the court said that the correct question was whether the losing party could establish that it did not receive a fair trial, not whether, as a disappointed litigant, it believed that the trial was unfair".

However, the headline-writers, skipped the meat of the judgment and turned to the treats at the end: "In these circumstances," the judgment proclaimed, "we have concluded, much to our regret, that we have no alternative but to recognise that the judge has erred so fundamentally in his approach to this trial as to have lost, or at least given the appearance of losing, his ability to try CWS' claim with an objective judicial mind … what is so troubling is that the judge has made findings of bad faith and false evidence against CWS and its principal witness, Mr Brydon, and against Mr Melmoth, who was not even a witness, when no bad faith had been pleaded or suggested, and then has inevitably been drawn … into utilising his conclusions about CWS' or its employees' bad faith for the purpose of deciding other disputed issues of fact and law. In this way the focus of the judge's objective vision was distorted.

"Reluctant as we are to reach these conclusions … we nevertheless have decided that there is no alternative to allowing this appeal and ordering a re-trial. There is no other way to ensure that justice and fairness are seen to be done …

"Our concern has been solely with the process by which [CWS's claim was dismissed] before Judge Seymour. A retrial may produce the same result, but CWS is entitled to a trial in which that result is reached fairly.

"Finally, we have not said anything about the wounding and sarcastic comments that the judge made about [CWS's legal team]. We cannot help feeling that these comments were informed by the same unfair view which the judge took of CWS' case. If the allegation of bad faith had been pleaded and put in issue during the hearing, counsel and solicitors would have been able to address it and would have been open to criticism if they had not done so. As it was we think that the judge's comments about them were unfair."

In CWS, the Court of Appeal did what it had to do. Its approach is to be commended. Principles of fairness and natural justice should never be sacrificed on the new altar of "proportionality", particularly where issues of honesty and unprofessional conduct are concerned. The court made it clear that justice must be seen to be done.