Pre-action Disclosure Orders

Author:Ms Helen Burt
Profession:Herbert Smith

Many potential litigants are making use of the court's power to order the disclosure of documents by a party who is "likely to be a party to subsequent proceedings".

Recent case law provides some insight as to when and whether the courts will exercise their discretion to grant pre-action disclosure and how the courts have interpreted the requirements set out for the granting of such orders. Financial advisers who receive an application or request for documents pre-action, need to consider carefully whether they are obliged to give the disclosure. They may have grounds to resist such an order being made against them.

Under the Civil Procedure Rules ("CPR") 31.16, prior to granting any such pre-action disclosure, the applicant is required to satisfy the court that:

1. Both the applicant and the respondent are likely to be parties to the subsequent proceedings;

2. Were proceedings to be commenced, the respondent's duty by way of standard disclosure would extend to those documents being sought by the applicant under the pre-action disclosure application;

3. Pre-action disclosure is desirable in order to dispose fairly of the anticipated proceedings; assist in the resolution of the dispute without proceedings or to save costs.

In Bermuda International Securities Limited v. KPMG (a firm) [2001] EWCA CIV 263, the Court of Appeal held that the appropriate test was that the applicant had enough evidence to plead a prima facie case but required pre-action disclosure in order to particularise it. The Court of Appeal cautioned, however, that: "the circumstances spelt out by the rule show that it will "only" be ordered where the court can say that the documents asked for will be documents that will have to be produced at the standard disclosure stage. It follows from that, that the court must be clear what the issues in the litigation are likely to be, i.e. what case the claimant is likely to be making and what defence is likely to be being run, so as to make sure the documents being asked for are ones which will adversely affect the case of one side or the other, or support the case of one side or the other." Accordingly, "there may be cases where the court will not be able to (be) confident that the documents sought on pre-action disclosure will necessarily relate to issues to which standard disclosure will be bound to apply. Indeed there may be cases where, without pleadings and detailed analysis of the issues which can only take place at the...

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