Playboy Club granted permission to bring unprecedented damages claim

February 22, 2019

In a judgment delivered by the High Court on Thursday, 21 February, Playboy Club London Limited (Club) has been granted permission to amend its claim for deceit (civil fraud) against Banca Nazionale Del Lavoro SpA (BNL) to claim as damages its costs incurred in an earlier negligence action against the same defendant.

The judgment is the latest development in the ongoing dispute between the parties which concerns a credit reference provided by BNL to the Club on the creditworthiness of a customer. The Club relied on the strength of BNL’s reference to grant the customer a cheque cashing facility under which he drew cheques in return for gaming chips. When the Club presented the cheques for payment, BNL claimed they were forgeries and refused to pay.

The Club initially brought an action in negligence against BNL, arguing that it had been careless in providing the customer reference. Although the Club won at first instance, the case was litigated up to the Supreme Court, which ultimately found against the Club. During that appeal process, the Club issued a separate claim in deceit against BNL on the basis of evidence which emerged during the negligence trial about the dishonest conduct of the bank’s employee who had provided the reference to the Club.

The Bank attempted to strike out the Club’s deceit claim as an abuse of process but this was rejected by the Court of Appeal and the Supreme Court recently refused permission for the Bank to appeal that decision. Accordingly, the Club has been permitted to continue with its deceit claim.

In the present application, the Judge hearing the application described the nature of the claim as “unprecedented” and stated that “the prospects of the Claimant succeeding are more than merely fanciful”. Permission for the Club to amend its claim was duly granted, which increased the value of the claim to approximately £2.1m.

Following the judgment, BNL opposed the Club’s position that it should be paid its costs of its successful application, arguing instead that the costs should be reserved to the trial judge. However, the Judge agreed with the Club and awarded it 85% of its costs of the application.

Simkins acted for the Club: Partner and Head of Litigation Paddy Gardiner led a team including Associates Jessica Welch and Rose Croshaw. Simkins instructed Simon Salzedo QC and Fred Hobson, both of Brick Court Chambers.

A complete copy of the judgment can be found here and a complete copy of the Ruling on Costs can be found here.