E-Disclosure
Electronic Disclosure and Inspection
Introduction
1. Nowadays the vast majority of business correspondence and documentation is in (or begins life and evolves in) electronic form of one sort or another. This technological reality permeates most conceivable strata of commercial litigation, while the courts (and indeed lawyers practising in those courts) may be perceived as having been slow in catching up. In an obvious attempt to redress the balance, after a substantial consultation exercise on 1st October 2010 a new Practice Direction 31B was annexed to Part 31, itself concerned of course with Disclosure and Inspection of Documents. The new PD31B concerns Disclosure of Electronic Documents. It has been introduced to regulate the approach practitioners should take when considering material relevant to a case which is stored electronically. In particular it aims to focus the parties on the sources of electronic material and give guidance to those with less experience of dealing which such issues. It is a fast-developing and increasingly crucial area of procedure that practitioners need to be aware of.
2. The Practice Direction is a vast thing for its type, running to some 36 paragraphs with various schedules and forms of questionnaire attached. It applies specifically to cases that are or likely to be allocated to the multi-track, but of course parties in other cases need to be alive to the obligations to make disclosure of documents, including electronic documents, under the general provisions of CPR Part 31.
3. "Electronic Document" for its purposes means any document held in electronic form. It includes, for example, e-mail and other electronic communications such as text messages and voicemail, word-processed documents and databases, and documents stored on portable devices such as memory sticks and mobile phones. In addition to documents that are readily accessible from computer systems and other electronic devices and media, it includes documents that are stored on servers and back-up systems and documents that have been deleted. It also includes Metadata and other embedded data which is not typically visible on screen or a print out.
Overview of the Practice Direction
4. The parties and their legal representatives must, before the first Case Management Conference, discuss the use of technology in the management of electronic documents and the conduct of proceedings (para. 8). Further, before the first CMC (or earlier, where appropriate in heavy or complex cases) they should discuss the disclosure of such documents (para. 9).
5. An Electronic Documents Questionnaire (EDQ) is set out in one of the Schedules. It is recommended that this EDQ should be exchanged by parties for the purpose of enabling to provide information to each other in relation to the scope, extent and most suitable format for disclosure of electronic documents in the proceedings (para. 10). The answers to an EDQ must be verified by a statement of truth. Rule 31.22 has been amended at the same time to provide that an EDQ completed and served by a party in accordance with PD 31B is to be treated as any other document which has been disclosed for the purposes of the general prohibition on the use of disclosed documents for any other purpose besides the action in which it was disclosed.
6. Also, an addition has been made to Section D (Case Management Information) of Form N150, the Allocation Questionnaire with which we are all familiar, under which the party providing the court with information about the progress (if any) towards agreement about the scope and extent of disclosure of electronic documents.
7. Rule 31.7 states that when giving standard disclosure, a party is required "to make a reasonable search" for documents falling within 31.6. In any circumstances it is not difficult for parties to disagree as to what may or may not be reasonable; in circumstances where electronic documents exist the margin for such disagreement is stretched logarithmically. A number of provisions in PD 31B and the questionnaire have the laudable aim of trying to put a lid on such potential disagreement: one awaits with interest how this will play out in practice.
8. The new practice direction represents the Court's attempt to impose a procedural structure upon an area of increasing importance and complexity, in relation to which a body of jurisprudence has grown exponentially over the last decade or so, to which I shall now turn. It is likely that in reviewing and determining issues that arise under the new Practice Direction much regard will be had to the general principles of this evolving caselaw.
Cases Concerning E-Disclosure
9. The decision of the High Court in Digicel (St Lucia) Ltd v Cable and Wireless plc , reviews many of the points which may arise when an application is made for additional disclosure of electronic documents. As a cautionary note, the disclosure exercise carried out by the defendants in that case required in situ searches in various countries and was said to have cost some £2 million in fees together with disbursements of some £175,000, and to have taken some 6,700 man hours of lawyers' time...
10. Such onerous burdens are not necessarily sufficient excuse for failing to do the job properly. In Earles v Barclays Bank the Judge imposed costs sanctions on the successful defendant for failure to conduct disclosure satisfactorily. He said:
"It might be contended that CPR 31PD 2A and electronic disclosure are little known or practised outside the Admiralty and Commercial Court. If so, such myth needs to be swiftly dispelled when over 90% of business documentation is electronic in form. The Practice Direction is in the Civil Procedure Rules and those practising in civil courts are expected to know the rules and practise them; it is gross incompetence not to."
Preservation of documents
11. Nor can a party get out of it by wiping hard drives, the modern document shredder. In Earles v Barclays Bank the Judge stated that while before proceedings are commenced there is a duty not to destroy documents deliberately, but no duty to preserve documents, after the proceedings have been commenced documents must be preserved. If they are not preserved, adverse inferences may (and in reality almost inevitably will) be drawn. Failure to preserve documents before commencement of proceedings may result in costs sanctions: see [69].
Standard disclosure
12. How far should a party go? The importance of restricting disclosure to standard disclosure was stressed in Nichia Corp v Argos Ltd . This approach is mirrored in the new practice direction, which seeks to impose reasonable restrictions. As posited above, it is anybody's guess how this will play out in practice.
13. Back to Digicel (St Lucia) Ltd v Cable and Wireless plc : "... it must be remembered that what is generally required by an order for standard disclosure is "a reasonable search" for relevant documents. Thus, the rules do not require that no stone should be left unturned. This may mean that a relevant document, even "a smoking gun" is not found. This attitude is justified by considerations of proportionality. This point is well made by Jacob LJ in Nichia Corporation v Argos Limited [2007] EWCA Civ 741 at [50] to [52]." Nichia was also cited and followed by Ramsey J in Vector Investments v Williams and may thus be regarded as the touchstone on the scope of the duty.
14. In Abela v. Hammonds Suddards , the High Court held that a party giving disclosure was not required to reduce the difficulties caused by the listing of a large quantity of documents by categories by separately listing documents which supported his own case and documents which supported the other party's case. Business as usual, then: a party can list the entirety of his disclosure sequentially, and leave it to his opponent to sift through in a quest for documents that might assist.
The need for cooperation
15. The parties have a duty to co-operate with one another as to the scope and manner of disclosure. Where a party fails to cooperate with the other party in relation to disclosure, but instead takes a unilateral decision as to the scope of disclosure to be provided, that party may (subject to consideration of proportionality) be ordered to carry out a second search, significantly increasing the costs incurred in giving disclosure: Digicel (St Lucia) Ltd v Cable and Wireless plc . Similarly, the Judge criticised the lack of cooperation in Earles v Barclays Bank .
16. In Goodale v The Ministry of Justice (Opiate Dependent Prisoners Group Litigation) Senior Master Whitaker directed the defendant to answer the questionnaire which was then under consideration by the Civil Procedure Rule Committee, and annexed a copy of the questionnaire as a Schedule to the judgment. This questionnaire is now comprised within the Schedule to the Practice Direction. A section of his judgment highlights the importance of E-disclosure in the modern world:
"This judgment concerns a serious practical problem for the case management of disclosure which is now occurring on a regular basis. The reason is that, since certainly the beginning of this decade, increasing numbers of public bodies and private businesses, not to mention individuals, have gone over to creating, exchanging and storing their documentation and communicating with each other entirely by electronic means. The end result is that an enormous volume of information is now created, exchanged and stored only electronically. Email communication, word processed documents, spreadsheets and ever increasing numbers of other forms of electronically stored information ("ESI") now often form the entire corpus of the documentation held by companies and individuals who become involved in litigation. So the incidence of paper disclosure is becoming less and less prevalent though in some cases it may still be critical. and the incidence of the disclosure of electronically stored information, or ESI as it is known, is becoming more and more so."
17. In Vector Investments v Williams Ramsey J reduced the costs awarded on account of difficulties caused by failure to meet, or to apply to the court for directions (at [90]-[93]):
"90 At the outset I observe, first, that Hammonds raised in correspondence a number of times the need for a meeting to discuss disclosure and inspection. Whilst there were telephone calls there was no meeting. In cases such as this, where there are large volumes of documents, I consider it is essential for the parties to discuss the scope and extent of disclosure in advance. It is regrettable that this did not happen in this case.
91 Secondly, there are references in the correspondence to possible applications to the court in relation to the issue of the way in which the documents were disclosed. Again, I consider that if major problems arise on inspection the parties should apply to the court so that issues are raised and dealt with at the time. Whilst I quite understand the parties are reluctant to be diverted from such activities as inspection by having to make a court application, issues can often be brought to a head and resolved by the court instead of dealing with them in lengthy correspondence between the parties."
Reasonable Search
18. Whether a reasonable search has been carried out must be decided by the court, either in advance of the search being done, or with hindsight, where a search had been carried out and its extent was challenged by the other party: Digicel (St Lucia) Ltd v Cable and Wireless plc . In Earles v Barclays Bank the Judge criticised the failure to procure copies of emails, and stressed the solicitor's duty to take appropriate steps to ensure that sufficient disclosure is given.
19. Of course what is reasonable depends upon the nature of the case and of the type of material in question and its location. Thus in Noble Resources SA v Gross , SMS messages were obtained from backups of BlackBerries. A forensic examination of BlackBerries also revealed fragments of SMS messages. In Al-Sweady, R (on the application of) v Secretary of State for the Defence the court criticised the Ministry of Defence for failing to carry out a sufficient search for documents, and emphasised the importance of an adequate document retrieval system, to avoid the waste of much public money and court time.
Timing
20. Late disclosure leads to delay, aborted hearings and of course wasted costs. It is accordingly deplored by the Courts. Thus where there was late disclosure by OFSTED in the Shoesmith judicial review case the costs of attending a hearing related to late disclosure were awarded to the claimant on the indemnity basis . Foskett J referred to "the wholly inadequate way in which Ofsted's duty of candour was addressed initially in this case."
Proportionality
21. In Hands v. Morrison Construction Services Ltd the applicant offered to meet the cost of pre-action disclosure of a large quantity of electronic documents, but Briggs J. declined to make the order sought, on the ground that it would be excessively burdensome. Shifting costs burdens and offers of payment will not force the court's hand to ordering disclosure where it is not otherwise warranted. Proportionality was considered in Nichia Corp v Argos Ltd and in Digicel , where the court considered whether it was proportionate to require a second search to be carried out, of back-up tapes and for additional keywords. It was also considered in Abela v. Hammonds Suddards and in Earles v Barclays Bank , where the Judge held that a Bank had incorrectly decided that a search for particular documents would not be proportionate.
22. In Goodale v The Ministry of Justice (Opiate Dependent Prisoners Group Litigation) one of the defendant's grounds of opposition to giving disclosure of electronic documents was the ground of proportionality. Senior Master Whitaker did not accept this, and directed the defendant to answer the questionnaire to assist in identifying the categories and locations of electronic documents so that an appropriate order for disclosure could be made.
Back-up tapes
23. As people from all walks of life have discovered to their cost, erasure of computer files is not necessarily the end of their digital existence. Recovery of back-up tapes was considered in Digicel . The parties' solicitors were ordered to meet to discuss how best the restoration of the back-up tapes could be done, having regard to degree of difficulty and cost. Similarly, recovery of e-mails from back-up tapes was considered in Abela v. Hammonds Suddards , where the Judge expressed doubts whether the process would be as difficult and costly as the reluctant solicitor defendants suggested.
24. As mentioned above, in Noble Resources SA v Gross , SMS messages were obtained from backups of BlackBerries and forensic examination of BlackBerries also revealed fragments of SMS messages. In Earles v Barclays Bank the Judge held that emails should have been recovered from backup tapes.
25. Conversely, and showing that each case depends upon its own facts and each application upon its circumstances, in Goodale v The Ministry of Justice (Opiate Dependent Prisoners Group Litigation the judge referred to the expense involved in restoring backup tapes. In Fiddes v Channel 4 , Tugendhat J held in a libel action that it would not be proportionate to require backup tapes of emails to be restored, at an estimated cost of £10,000:
"21. I accept that in an ideal world, the claimant should have disclosure of the emails sought. But it is not an ideal world. In this case, it is a matter of speculation whether the search that he requests I order would produce anything relevant, and if it did, whether it would help the Claimant's case or undermine it. There will undoubtedly be cases where retrieving and searching back up tapes will be a proportionate exercise in a libel action. But in this case, it seems to me, that the issues in the action will be most likely to be resolved on the contemporaneous documents that have been disclosed and the oral evidence of the Claimant and the Third Defendant, if the case gets that far. In my judgment, the claimant cannot in the present case show that there is a sufficient likelihood of retrieving any email that is both relevant and significant and on that basis, I dismiss this application."
The Court of Appeal approved the decision on 24 March 2010 . Similarly, in Picard (Representative of Bernard L. Madoff Investment Securities LLC) v FIM Advisers Llp , a case concerning the everyday question of disclosure under Article 21 of Schedule 1 to the Cross-Border Insolvency Regulations 2006, the court decided that it would not be appropriate to order disclosure of documents in back-up storage at that stage.
Keyword searches
26. In the now familiar Digicel (St Lucia) Ltd v Cable and Wireless plc , the court directed that additional keyword searches should be carried out. In Goodale v The Ministry of Justice (Opiate Dependent Prisoners Group Litigation) the judge directed that there should be sampling to see how the initial list of 31 keywords should be fine-tuned.
Date ranges
27. The date ranges within which searches should be made and disclosure given have come under judicial scrutiny, too. In Digicel the court directed that a date range should be varied. In Picard (Representative of Bernard L. Madoff Investment Securities LLC) v FIM Advisers Llp the court decided what should be the appropriate date range for disclosure under Article 21 of Schedule 1 to the Cross-Border Insolvency Regulations 2006.
Individual email accounts
28. Individual email accounts of (for example) employees and directors are not protected. In Digicel the court directed that additional email accounts should be searched.
Sampling, incremental or staged approach
29. The possibility of adopting an incremental approach to the search was considered in Nichia Corp v Argos Ltd and in Digicel, where the judge's order reflects a staged approach. In Goodale the defendant opposed giving disclosure of electronic documents on the ground of proportionality. Senior Master Whitaker did not accept this, and directed the defendant to answer a questionnaire to assist in identifying the categories and locations of electronic documents so that an appropriate order for disclosure could be made: "I am quite content that the four key witnesses that have been named by the claimants are the right people whose ESI needs to be searched. Numerous other witnesses and custodians of documents have been mentioned but in a case like this, I do not think that searching the ESI of all of them immediately is the right way to go about this exercise. In terms of a search one should always start with the most important people at the top of the pyramid, that is, adopt a staged or incremental approach. Very often an opposing party will get everything they want from that without having to go down the pyramid any further, often into duplicate material. If necessary we can go on to consider other documents such as minutes of meetings etc that may be held centrally which might show what, if any, discussions took place as to what the policy and practice of the defendant should be. Any other potential sources of material likely to be relevant will very likely come to light when the questionnaire referred to in paragraph 14 above is completed."
Databases
30. It was held as long ago as 1991 in Derby v Weldon that a computer database containing information capable of being retrieved and converted into readable form was a "document", so that the court could order discovery under Order 24 of the Rules of the Supreme Court. In Marlton v Tektronix UK Pumfrey J confirmed that a computer database may be treated as a "document" in the context of disclosure under the Civil Procedure Rules, and held that disclosure should be given of documents which established the date on which e-mails had been received.
Metadata
31. An order for disclosure of metadata was made in a case where it was alleged that a record of a meeting had been made long after the event: Hellard v Money .
Cross-border data transfers
32. In Re Madoff Investment Securities LLC the court authorised the transfer of data to New York by the Madoff liquidator on the grounds of public interest, necessity for the purpose of, or in connection with, any legal proceedings, and necessity for the purposes of establishing, exercising or defending legal rights.
Practice Points and Cautionary Tales
33. As a pointer to where all this may take a case, an extreme example is Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd , famous for its seminal approach to costs under the CPR, the trial bundle contained 550 ring binders and the cost of photocopying approached £1 million ...
34. On the case management side of things, it pays to get disclosure sorted out as early as possible. In Elliott Group Ltd v GECC UK Coulson J held that it would require a very strong case indeed for the trial to be adjourned merely because the claimants' disclosure was a more extensive task than they had originally contemplated.
35. In Hedrich v Standard Bank London Ltd , the Court of Appeal held, rejecting an application for wasted costs against a solicitor, that negligence should be judged by "the standards of a solicitor of ordinary competence, the competence, that is, of a typical, reasonably well-informed high street solicitor ... not the Rolls Royce standards which the big City firms ... must and do uphold". It appears that there are shifting standards of competence to be expected of the profession. Applying the standard considered appropriate, the solicitor had not been negligent in failing to challenge his client's assertion that e-mails had been lost and were no longer available.
Costs
36. Back in the primordial mists of legal prehistory, in Grupo Torras S.A. v. Al-Sabah (decided pre-CPR), no fewer than 50,000 documents were scanned into electronic form, from which compact discs could be made. Mance J. held that since the plaintiffs had scanned the documents for their own purposes, they could not charge any part of the scanning costs to other parties, but only the costs of cutting and supplying the compact discs. The costs of the scanning could in due course form part of the plaintiffs' reasonable costs of the action if the plaintiffs were in due course awarded costs. The Judge said that a party scanning documents into a database could apply to the court for an order regulating matters, including the basis of charging for copies, in advance of scanning the documents.
37. It pays to conduct disclosure assiduously: in Earles v Barclays Bank the Judge decided that the successful defendant should recover only 50% of its costs as a result of failure to conduct disclosure adequately. Similarly in Shoesmith (as mentioned above) the Defendant was on the receiving end of an order for costs on the indemnity basis after a hearing was convened to deal with the consequences of late disclosure.
Sanctions - Failure to disclose documents
38. The test for deciding whether sanctions should be applied for destroying documents before and after commencement of proceedings was considered in the moderately reported Douglas v Hello! Ltd , a case in which emails had been deleted. It was held by the Vice-Chancellor:
"There is, however a distinction to be drawn between those which were destroyed or disposed of before these proceedings were commenced and those which were destroyed or disposed of thereafter. With regard to the former category it is established in the very recent decision of the Court of Appeal for the State of Victoria in British American Tobacco Australia Services Ltd v Cowell and McCabe [2002] VSCA 197 paras 173 and 175 that the criterion for the Court's intervention of the type sought on this application is whether that destruction or disposal amounts to an attempt to pervert the course of justice. There being no English authority on this point I propose to apply that principle, not only because the decision of the Court of Appeal for the State of Victoria is persuasive authority but because I respectfully consider it to be right."
39. In Douglas it was found that emails deleted before commencement of proceedings had been routinely deleted in the ordinary course of business, so there had been no attempt to pervert the course of justice and it was not appropriate to apply sanctions. Certain emails deleted after the commencement of proceedings had been deleted deliberately, but it was not appropriate to strike out paragraphs of the Defence as a fair trial of the relevant issues was still possible; the court applied the dictum of Millett LJ in Logicrose Ltd v Southend United Football Club Ltd :
"I do not think that it would be right to drive a litigant from the judgment seat without a determination of the issues as a punishment for his conduct, however deplorable, unless there was a real risk that that conduct would render the further conduct of proceedings unsatisfactory. The court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice."
40. Contrast the approach in Marine Rescue Technologies Ltd v Burchill , where failure to conduct a proper search for documents (including electronic documents) led to a stern warning that such failure might well result in the claim being struck out.
41. In Earles v Barclays Bank the Judge reviewed the cases on drawing of adverse inferences, but decided on the facts that no adverse inferences should be drawn. Far more condign was the approach in Rybak v Langbar International Ltd , where the claim and defence to counterclaim were struck out following the claimant's use of secure deletion software with the intention of deliberately deleting files which might otherwise have been retrievable. The obvious distinction leading to such severe sanction was the deliberate nature of the Claimant's act.
Failing to have meetings with the other party
42. Dovetailing with the need for co-operation, discussed above, an absence of such co-operation will lead to costs sanctions in appropriate cases. Thus in Vector Investments v Williams , Ramsey J reduced the costs awarded to a successful litigant on account of failure to hold meetings or to apply to the court for directions.
Fabricating documents
43. Quite apart from the temptation to litigants to destroy potentially incriminating evidence, what of the opposite urge, to fabricate documents to bolster a shaky position? This almost inconceivable question takes us upon a sizeable detour into a series of interesting cases. The Court of Appeal decision in Arrow Nominees v Blackledge was the first to consider in any detail the proper response to the dishonest conduct of litigation. This was a commercial dispute, in short by Arrow alleging unfairly prejudicial conduct by Blackledge. During the course of proceedings, a challenge was made to the authenticity of six letters disclosed by Arrow, whose then solicitors admitted (three months before trial) that these letters were "not authentic". The individual in control of Arrow later admitted that he had forged them. Perhaps unsurprisingly, Blackledge applied to strike out the petition. The application was refused at first instance on the basis that there was no jurisdiction to strike out unless there was a substantial risk that there could not be a fair trial. The judge held that there was no evidence of such a risk, but that if further evidence of impropriety emerged then a strike out might become appropriate.
44. Further evidence at the trial indicated that the document fabrication and destruction was wider than the six letters. Following the conclusion of the petitioners' evidence, the respondents (on the judge's invitation) renewed their strike out application, but the judge refused the application on the grounds that a case could still be presented which did not rely upon the tainted evidence and therefore there was no substantial risk that a fair trial could not be held.
45. Perhaps unsurprisingly the respondents appealed, and the Court of Appeal held that once the tainted evidence was excluded there was no evidence to support the claim. The Court of Appeal also made a wider point that "where a litigant's conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice the court is entitled—indeed, I would hold bound—to refuse to allow that litigant to take further part in the proceedings and (where appropriate) to determine the proceedings against him."
46. The court does not strike out a claim due to disapproval of a party's conduct, but because it believes that the conduct has led to an unacceptable risk that there will be an unsafe judgment and that it is inappropriate for resources to be expended on a trial. The dishonest litigant may be punished through proceedings for contempt or perjury, if appropriate.
47. Similar issues arose in perhaps a more extreme fashion in the recent case of Zahoor v Masood , which again found its way to the Court of Appeal. Zahoor may be seen as a fairly extreme example of the dishonest conduct of litigation: in a dispute between former friends and business partners over share allocations and unpaid wages, the serial dishonesty was on both sides and consisted of over 50 challenged documents, false dating in disclosure lists, and judicial findings that witnesses from both sides had, bluntly, lied. Mummery LJ described the proceedings as "lamentable litigation" in which "[e]ach of the individual parties, by using reprehensible means, set out to improve his own prospects of success".
48. There was no application to strike out the claim. However, the judge considered whether to do so of his own volition in light of Arrow Nominees. He concluded that he should not and went on to give a judgment on the claim, largely in favour of the claimant. The defendants appealed. One of their grounds of appeal was that the claim should have been struck out on Arrow Nominees principles. There was clear guilt on both sides which the judge treated as highly relevant to his decision not to strike out the claim. He felt that to do so would reward the guilty defendant as much as the guilty claimant and leave the defendant with a windfall. The Court of Appeal rejected this approach and stated: "the defendants' misconduct was irrelevant."
49. The Court of Appeal made clear that it is for the judge, in the context of the court's Arrow Nominees jurisdiction, to consider only the conduct of the claimant and whether the claimant has forfeited his right to an adjudication of his claims. It is not for the judge to weigh the misconduct of the claimant against that of the defendant. The Court of Appeal refused the appeal on the grounds that once the proceedings had run their course and the resources had been expended, there was nothing to be achieved by a strike out at that stage, as opposed to the judge giving a judgment and then other steps (such as contempt proceedings) taking place. However, it seems clear that if proceedings had not been at such a late stage, the Court of Appeal would have allowed the appeal. Dishonest Claimants have been warned.
50. Not perhaps dishonest per se, but a pretty extreme example of wrongdoing was found in Raja v Van Hoogstraten where the defendant was found to have had the claimant murdered to prevent him pursuing his claim. The judge ordered that the defence (and counterclaim) be struck-out, in part relying upon the Arrow Nominees jurisdiction. In the circumstances, the result is perhaps not particularly startling.
51. Murder aside, both Arrow Nominees and Zahoor dealt with claimants who had sought, through dishonest means, to bolster the merits of what they perceived to be a weak claim. A related scenario is where a party seeks to improve an otherwise genuine claim through dishonesty, for example inflating damages through false evidence, but where the underlying claim is well-founded. This was the case in Shah v Ul Haq , a road traffic claim in which two claimants had a genuine claim, but also claimed for a third person (the driver's mother) who was not in the car at the time of the accident. The defendant applied to strike out the claim. The judge refused the application, but ordered the two successful claimants to pay indemnity costs. The defendant appealed.
52. The Court of Appeal held that Arrow Nominees considerations do not apply where there is no suggestion that it is not possible to hold a fair hearing. Where a claim has simply been exaggerated, but a fair trial is still possible, then the claim should not be struck out. Again the court held that the power to strike out is a case management tool to preserve resources and prevent unsafe judgments. It is not to punish reprehensible conduct and therefore is not appropriate where the party acted badly but a safe judgment could still be given (as was the case in Shah).
53. This does not mean that dishonest litigants can expect to get off scot-free: the sanction for dishonest conduct of litigation is always in costs. In The Bank of Tokyo-Mitsubishi UFJ, Ltd v Baskan Gida Sanayi Ve Pazarlama A.S. the successful defendant was held to have taken a corporate decision to lie regarding significant matters in the dispute (although the conspiracy claim against it failed). The judge deducted from the defendant's costs an amount referable to the costs of pursuing its false case and the claimants' costs in dealing with that case. This is unsurprising. However, a significant costs penalty was also imposed for the defendant's misconduct in advancing a false case.
Illegally or improperly obtained evidence
54. From a line of authority commencing with Jones v University of Warwick , a P.I. case notable for the deployment by insurers of surveillance evidence obtained by an inquiry agent tricking his way into the Claimant's home under the pretence of being a market research agent, and then proceeding to film his deft use of the allegedly injured hand, the Courts have historically demonstrated reluctant acquiescence in the use of evidence obtained either illegally or improperly.
55. The tide was stemmed abruptly by the Court of Appeal in the matrimonial case of Tchenguiz v Imerman where, having reviewed the authorities it held that the improperly obtained evidence should be returned. As ever, the facts are instructive: (rightly) anticipating a refusal by H to disclose assets in ancillary relief proceedings, W's brothers wrongfully accessed H's computers to gather information. W appealed against an order restraining her use of the information obtained, saying that "the law which protects Mr Imerman's confidential information and documents should yield to the need to ensure that he cannot escape his true liability by concealing his assets. The law should, she says, recognise her right to truthful disclosure, even if that can only be achieved by unlawful methods. "
56. The appeal failed. The Court of Appeal held that "What was done here cannot be justified under the so-called Hildebrand rules. There are no such rules. There are no rules which dispense with the requirement that a spouse obeys the law." There was no sufficient justification for refusing to order the return of the papers. A party to ancillary relief proceedings had an adequate remedy in applying for search and seizure orders.
The court emphasised its greater but more focussed involvement in disclosure in ancillary relief proceedings than in general litigation. Hildebrand itself is accordingly no authority for the proposition that a spouse may, in circumstances that would otherwise be unlawful, take, copy and retain copies of confidential documents. In other words, it is no authority for the so-called Hildebrand rules, but is so only as to the time when copies obtained unlawfully or clandestinely should be disclosed to a spouse. That a wife might plead the right against self incrimination to avoid saying how documents were obtained, that did nothing to reduce her duty to disclose her possession of them.
English law recognises that although marriage may be a partnership of equals there is nonetheless a sphere in which each spouse has, within and as part of the marriage, a life separate and distinct from the shared matrimonial life. This, after all, is what one would expect. It is, moreover, implicit in the protection which article 8 of the European Convention affords each spouse in relation to his or her personal and individual private life, in contrast to their shared family life. It was therefore incongruous now to assert that one spouse has no right of confidence as against the other.
" the so-called Hildebrand rules cannot in law be justified on any of the bases suggested, whether on the basis of lawful excuse, self-help or public interest, or, indeed, we would add, on any other basis. The tort of trespass to chattels has been known to our law since the Middle Ages and the law of confidence for at least 200 years, yet no hint of any defences of the kind now being suggested is to be found anywhere in the books. Self-help has a narrow and jealously policed role to play, for example, in the form of the right in certain circumstances to abate a nuisance, but it is far too late to suggest that self-help should be extended into the territory we are here concerned with. After all, legislative prohibition of self-help, enforced with criminal penalties, dates back to the Statute of Marlborough of 1267. Section 1, which is still on the statute book, after providing that "all persons, as well of high as of low estate, shall receive justice in the King's court", prohibits anyone taking "revenge or distress of his own authority, without award of the King's court" and provides for the punishment of offenders by fine. We do not suggest that this provision is directly applicable in a case such as this; rather we point to it as illustrative of the law's long-standing aversion to unregulated self-help."
57. Hacking into computers in a quest for otherwise undisclosed data is clearly no substitute for a proper application for specific disclosure.
Conclusion
56. Albeit a family case, this will have resonance across all branches of the law: over-eager litigants be warned. Drawing matters together, E-disclosure effectively requires an early and assiduous search for documents in precisely the same way as paper disclosure, the honest and compliant litigant having nothing procedural to fear, whatever the substantive merits of his case. Dishonest or recalcitrant litigants, on the other hand, can expect (as ever) to meet with condign costs penalties, even if the courts can be seen to shy away from the ultimate sanction of striking cases out. Information Technology being such a central part of commercial life, litigants and their solicitors need to embrace the requirements this imposes upon the effective conduct of litigation.
Mark Simeon Jones
3 Dr Johnson's Buildings
19th January 2011