District Judge Julie Exton on how to make an early strike for document disclosure

What can a claimant's solicitor do if a defendant is thwarting legitimate attempts to investigate a client's claim by refusing to disclose documents and/or comply with a relevant pre-action protocol? A powerful and increasingly employed weapon in a claimant solicitor's armoury is to apply for an order for disclosure before proceedings start.

Such an application is permitted under section 33 of the Supreme Court Act 1981 or section 52 of the County Courts Act 1984, and is governed by the Civil Procedure Rules 1998 (CPR), rule 31.16.

The application should be made in accordance with part 23 of the CPR and must always be supported by evidence (and, it is suggested, a draft order complying with rule 31.16(4)).

The contents of the application notice itself will be sufficient provided it is verified by a statement of truth.

Satisfying the court

The potential claimant then has four hurdles to overcome because the court may make an order only where:

- The respondent is likely to be a party to subsequent proceedings;

- The applicant is also likely to be a party to those subsequent proceedings;

- If proceedings had started, the respondent's duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and,

- Disclosure before proceedings have started is desirable in order to dispose fairly of the anticipated proceedings; assist the dispute to be resolved without proceedings; or save costs.

So, how does the court go about exercising its discretion? In Bermuda International Securities v KPMG (2001) The Times, 14 March, and two years into the CPR regime, the Court of Appeal decided that, at such an early stage in the life of rule 31.16, it was inappropriate to lay down guidelines as to how the discretion should be exercised.

But by the time Herbert Black and others v Sumitomo Corporation [2002] 1 WLR 1562, came before it at the end of 2001, the Court of Appeal had become less reticent.

It made it clear that what was required was that the persons concerned were 'likely' to be parties if subsequent proceedings were issued; it did not necessarily have to be likely that proceedings would be issued.

And, for these purposes, 'likely' meant 'may well' rather than 'more probably than not.'

Furthermore, for jurisdictional purposes, the court was only permitted to consider the granting of pre-action disclosure where there was a real prospect in principle of such an order being fair to the parties if litigation were commenced, or of assisting the parties to avoid litigation, or of saving costs in any event.

Only once such a real prospect had been established could the question of discretion be considered.

However, in reality, the jurisdictional hurdle was not a high one and the real question was the exercise of discretion.

That exercise required a detailed consideration of all the factors.

Having said that, the Court of Appeal expressed the view that the more focused the complaint and more limited the disclosure sought, the easier it would be for the court to exercise its discretion in favour of pre-action disclosure.

And third parties?

In Moresfield Ltd and others v Banners and Banners (Prospective Part 20 Claimant) v KPMG (Prospective Part 20 Defendant) [2003] EWHC 1602 (Ch), a firm of solicitors (B) applied under rule 31.16 for pre-action disclosure and under rule 31.17 for non-party disclosure against a firm of accountants (K) for two of K's files in relation to work carried out by K with respect to the sale of shares by the claimants in the action.

The claimants were suing B for damage flowing from the drafting of the share sale agreement.

There had been an agreement between B and K for mutual disclosure but later, when B's solicitors pressed for this, K resisted on the basis that the proposal had been made in the context of K's possible joinder as a part 20 defendant, and circumstances had changed in that it no longer appeared that they would be so joined.

Mr Justice Lawrence Collins was having none of it.

He reiterated that the general principles governing rules 31.16/17 were to be found in Black.

B had made out a case for pre-action disclosure under rule 31.16, and it was no bar to such an order being made that the permission of the court would be required under rule 20.6 to bring a part 20 claim against K.

If the conclusion on the rule 31.16 application was wrong, there was no objection to an alternative application under rule 31.17.

The test was whether the files were likely to support B's case or adversely affect the claimant's case.

Here, the duties which K undertook might have an impact on the scope of B's duties and, consequently, their liability to the claimants.

Defending an application

But an order for pre-action disclosure under rule 31.16 is far from a foregone conclusion and there are a number of grounds on which a defendant can properly resist an application.

It was not ordered against a proposed defendant where he was never likely to come under a duty to make such disclosure during the proceedings because the proposed claim had poor prospects of success and was liable to be struck out (K v Secretary of State for the Home Department (2001) LTL 23 January), or where it was hard to see whether there was a real issue between the parties for the purpose of deciding whether they were likely to be party to subsequent proceedings (Medisys Plc v Arthur Andersen [2002] PNLR 22), or where it was impossible to have a clear idea of what the issues were likely to be (David Ruffle v Potter Raper [2002] EWHC 488 (Tec)).

Such an application will also be refused where the potential claims are too speculative or the disclosure sought too broad (Snowstar Shipping Company Ltd v Graig Shipping Plc and Fortis Bank [2003] EWHC 1367 (Comm)).

None of this is rocket science.

The general approach of the courts, quite rightly, is that both the spirit and the letter of the CPR and any relevant pre-action protocol require the parties to put their cards on the table as soon as possible in the interests of an early resolution and the inevitable saving of costs.

However, the hurdles (low though they might be) in rule 31.16(3) have to be jumped; fishing expeditions will not be tolerated.

District Judge Julie Exton sits at Weston-super-Mare County Court