The High Court has shed light on the extent to which parties need to actively hunt down the documents that they know to exist, but which are damaging to their case.
In Castle Water Ltd v Thames Water Utilities Ltd, Mr Justice Stuart-Smith said this aspect of the current disclosure pilot in the Business and Property Courts had not yet received ‘authoritative clarification’.
Under the pilot rules, parties are obliged to disclose ‘known adverse documents’ that may damage their case, unless they are privileged. Mr Justice Stuart-Smith said the question then arose as to what obligation a party has to ‘discover’ whether it is holding any such documents.
The judge concluded that a party must make ‘reasonable and proportionate checks’ to see if it has known adverse documents, and to locate them. To find otherwise would amount to a ‘rogue’s charter’, he added.
Drawing a distinction between ‘checks’ and ‘searches’, Mr Justice Stuart-Smith pointed out that a ‘known’ adverse document is one ‘of which a party is aware without undertaking any further search’. But he added that the requirement to disclose such papers would be ‘emasculated’ if there were no obligation at all to ‘look’ for them. Citing the argument put to him by counsel, the judge said: ‘It would be absurd if a party were able to say, “I know I have an adverse document, but I don’t know whether it is in the left-hand drawer or the right. I have therefore not located it”.’
The judge also shed light on what is meant by the ‘continuing’ obligation to disclose known adverse documents, as worded in the relevant practice direction. He said this did not mean that a party needed to keep ‘renewing’ its checks, if nothing had changed. But if one party to the litigation ‘materially’ shifted its position, this might bring new papers within the definition of known adverse documents, and so these would need to be disclosed.
The two-year disclosure pilot began on 1 January 2019 and is likely to be extended for another year.