ACL Netherlands v Sandelson: currency risk, interest and the Autonomy fraud aftermath

The High Court has handed down its consequentials judgement in ACL Netherlands BV & Ors v Jeremy Vaughan Sandelson & Ors [2026] EWHC 691 (Ch), resolving a set of complex post-trial disputes arising from the protracted HP–Autonomy fraud proceedings. Mr Justice Hildyard's ruling addresses four substantive areas: the allocation of foreign exchange risk in a "dog-leg" FSMA claim, credits for third-party settlement sums, pre-judgement interest on both damages and costs, and the refusal of permission to appeal on all four proposed grounds.

Currency risk in the dog-leg claim

The most novel issue concerned whether the Estate of Dr Michael Lynch should bear the foreign exchange losses that arose after Autonomy admitted liability to HP's acquisition vehicle, Bidco, in September 2014 — some eleven years before final quantum was determined.

The First Defendant argued that once Autonomy admitted a dollar-denominated liability to Bidco, the exchange rate risk shifted to Autonomy. Because Autonomy's functional currency was sterling, any subsequent deterioration in sterling against the dollar was said to be caused by Autonomy's own decision not to hedge, not by Dr Lynch's breach of duty.

Hildyard J rejected this. Drawing on The Texaco Melbourne [1994] 1 Lloyd's Rep 473 and the Privy Council's recent decision in Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025] UKPC 53, the court held that currency fluctuations between breach and judgement remain an incident of the claim, regardless of when crystallisation occurred. Critically, the First Defendant had neither pleaded nor proved any factual basis — such as an unreasonable failure to hedge — that could have displaced that position. Whether framed as a causation argument or a failure to mitigate, the absence of any supporting plea was fatal.

Settlement credits and deductions

Both the Deloitte settlement (US$45 million) and the Hussain settlement (approximately US$104 million) required careful apportionment before any net credit was applied against the First Defendant's liability. The judge applied the framework from FM Capital Partners Ltd v Marino [2020] EWCA Civ 245 and Kea Investments Ltd v Watson [2023] EWHC 1830 (Ch), under which a claimant may allocate recoveries against separate claims first, with credit given to remaining defendants only for the excess referable to overlapping claims.

In respect of costs deductible before crediting the Deloitte sum, the court expressed concern about the reliability of PwC's costs — calculated using a proxy approach — and about the inclusion of fees charged by Choate, a Boston firm whose involvement in purely English proceedings had not been adequately justified. The allowable deduction was capped at £4.5 million. For the Hussain settlement, the court permitted a costs deduction of £1,100,000, reduced from the £1,477,224 claimed, noting amongst other things that a recoverable sum had already been capped by an earlier Mann J order.

Pre-judgement interest: rate, basis and period

The claim for compound interest on the Misrepresentation Claims failed. Following Granville Technology Group Ltd v LG Display Co Ltd [2023] EWCA Civ 980, the court held that equitable compound interest requires the defendant to hold and benefit from a specific fund taken from the claimant — not merely to have acted fraudulently. A statutory award of simple interest under section 35A of the Senior Courts Act 1981 was the appropriate remedy.

On the applicable rate for dollar-denominated sums, Hildyard J adopted a blended approach, settling on the Federal Funds Rate plus 1% rather than US Prime, finding that US Prime carries a risk premium materially in excess of the Bank of England base rate plus 1% ordinarily applied to sterling awards. Consistency of methodology across currencies weighed in favour of the Fed Rate analogy.

More significantly, the court exercised its discretion to truncate the pre-judgement interest period. Despite the scale of the proven fraud, the judge found that the claims had been grossly exaggerated from the outset — the US$8.8 billion write-down having been driven in large part by HP's corporate objectives rather than any principled loss assessment. That exaggeration substantially prolonged the proceedings. Interest was accordingly restricted to run until 1 May 2023 rather than the date of the consequentials order, representing a curtailment of over two years.

The same logic informed the award of pre-judgement interest on costs, which was confined to sterling-denominated invoices at the applicable treasury investment rate, with the end date aligned to the truncation applied to damages interest.

Permission to appeal refused

All four proposed grounds of appeal — the Bidco reliance point, counterfactual share price, counterfactual negotiation methodology, and the plaintiff's currency — were refused. The court characterised the Bidco point as a "lawyers' construct" unsupported by the Abu Dhabi decision, and held that the remaining grounds raised no question of law with a realistic prospect of success on appeal.

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