Scope of third party disclosure clarified

In a recent application, a party sought an order for disclosure of certain documents from a third party. The Court has discretion to order third party disclosure only where (a) the documents sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and (b) disclosure is necessary in order to dispose fairly of the claim or to save costs (Civil Procedure Rule 31.17(3)). For reasons provided further below, the applicant was prevented from deploying the documents in the substantive proceedings and, as a result, the respondent submitted that the documents could not ‘support the case of the applicant’. However, the Court decided that the relevant rule did not go so far as to require the documents sought to be ‘deployed’ in the relevant proceedings. Once the applicant inspected the documents, it may be able to prove their contents in other ways, such that the documents may support its case even if they could not, themselves, be deployed as part of its case in the proceedings.

Background and the Judge’s decision

Mr Barker established a discretionary trust in the late 1990s. A dispute relating to the trust subsequently arose, settlement negotiations with some of the beneficiaries were conducted, and a compromise agreement was entered into. The applicant, Twin Benefits, then commenced proceedings on behalf of two beneficiaries (twin children of Mr Barker), alleging that neither the twins, nor anybody acting on their behalf, had been notified or involved in those negotiations in any way, that the settlement was deeply disadvantageous to them, and there was a prima facie case that their interests were not properly taken into account. The defendants in those proceedings brought applications for the summary disposal of that claim.

Before the hearing of those applications, Twin Benefits sought third-party disclosure from a solicitor who was involved in the dispute settled by the compromise agreement. The basis of Twin Benefits’ application was Civil Procedure Rule 31.17(3), which provides that the Court may order third party disclosure only where (a) the documents sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and (b) disclosure is necessary in order to dispose fairly of the claim or to save costs.

Some of the documents sought were protected by legal professional privilege (“LPP”), and the respondent resisted disclosure of those documents on this basis. Although it was common ground that the twin children were jointly entitled to that LPP, the respondent submitted that the twins could not waive LPP without the consent of the other interested party (which consent was not given). As LPP would prevent Twin Benefits from deploying the documents as part of its case in the substantive proceedings, the respondent submitted that the documents sought could not ‘support the case of the applicant’; CPR 31.17 was therefore not satisfied. However, the applicant submitted that it was not necessary to show that the documents could be deployed as part of its case in order to satisfy the relevant rule; once the applicant had seen the content of the documents, it could attempt to prove their contents in other ways. The Judge accepted this line of argument.

Comment

Despite the presence of increasingly sophisticated document management systems, parties can still find themselves caught up in proceedings without all the necessary documents. In certain circumstances, a third party disclosure order may be required in order to obtain the relevant documents. While this judgment is quite fact-specific, it helpfully confirms that the scope of third party disclosure orders extends to permitting the inspection and disclosure of documents for the purpose of enabling a party to work out how best to present its case, even if the documents themselves may not be ‘deployed’ in the substantive proceedings. In this case, the Judge considered that the documents were likely to give a ‘strong indication’ of whether or not Twin Benefit’s beliefs about their case were correct. The Judge concluded that early disclosure and inspection was likely to promote the speedy, just and efficient resolution of the dispute, and may avoid the need for a trial. It will be these factors that the Court will take into account when deciding whether an order for third party disclosure is appropriate.

Further reading:

Twin Benefits Limited (Applicant) -and- (1) Iain Paul Barker (2) Confiance Limited (Defendants) -and- Alison Meek (Respondent) [2017] EWHC 177 (Ch)
Three Rivers District Council & Ors –v- Bank of England (No. 4) [2003] EWCA Civ 1182