Pre-Action Disclosure In Fraud Claims


The Civil Procedure Rules (CPR) introduced a new procedure for pre-action disclosure of documents. CPR 31.16 provides that disclosure can be ordered prior to the commencement of proceedings where the Court is satisfied that it may dispose fairly of the anticipated proceedings, assist in the dispute being resolved without proceedings, and save costs. The procedure is available in all mainstream commercial disputes, including those alleging fraud.

The applicant must satisfy the Court that both he and the respondent "are likely to be parties to subsequent proceedings". This requires the Court to embark on at least some assessment of the nature and the strength of the applicant's case, and it is not sufficient for the applicant for pre-action disclosure merely to state an intention to commence proceedings. There must be an adequate basis for the claim he intends to bring, although the claim need not be a prima facie claim.

Recent cases have shed some light on how a Court might assess an applicant's case when deciding whether to grant pre-action disclosure. In Bermuda International Securities Limited v. KPMG (a firm) [2001] EWCA CIV 263 it was held that the appropriate test was that the applicant has enough evidence to plead a prima facie case but seeks pre-action disclosure in order to particularise it.

This formula was expanded slightly in the first instance decision in Herbert Black and others v. Sumitomo Corporation and Others (Unreported, 26 July 2001), a decision of Michael Brindle QC sitting as a Deputy Judge of the Commercial Court. In that case it was held that disclosure could be appropriate where there was not necessarily enough evidence to make out a prima facie case but there was a reasonable basis for making an intended claim.

During the course of argument in the Black case, leading counsel for the respondent sought to argue that the Court should be particularly wary of permitting disclosure before statements of case were filed where serious allegations of fraudulent or similar behaviour were involved. The thrust of the argument appeared to be that the English procedural rule that imposes restrictions on the pleading of fraud (in the absence of particulars) should militate against allowing pre-action disclosure. Such an argument, if accepted, could have put claimants in fraud cases at a distinct disadvantage - in effect requiring the victims of fraud to particularise their misfortune in advance of pre-action disclosure - exactly...

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