UK: Threshold Test for Non-Party Disclosure

Last Updated: 9 October 2002
The recent Court of Appeal decision in Three Rivers District Council & Others v Governor & Company of the Bank of England [2002] EWCA Civ 1182 has considered the threshold test for a party obtaining disclosure from a
non-party. The decision is likely to result in more successful applications for non-party disclosure.

Some eleven years on, the fallout from the collapse of the Bank of Credit and Commerce SA (BCCI) is still being dealt with by the courts and the Three Rivers case is yet another instalment. The claimants, including Three Rivers District Council, are former depositors in BCCI. Following the public inquiry into the collapse of BCCI by Lord Justice Bingham (which led to the publication of the Bingham Report), the claimants issued proceedings against the Bank of England (the “Bank”), the primary claim being that of misfeasance in public office by officials of the Bank in their handling of the BCCI crisis. The action is still proceeding before the courts, and the issue before the Court of Appeal on this occasion was that of disclosure.

Following the close of pleadings, the claimants made two applications for disclosure, one against the Bank and one against HM Treasury, the latter not being a party to the proceedings. The documents sought from the Bank, which included the documents sought from the Treasury, were the evidence and other material obtained and produced by and on behalf of Lord Bingham during the course of the inquiry. The applications were first heard by Tomlinson J who held that the documents sought were not in the control of the Bank under CPR 31.8 and the Bank was under no obligation to disclose them. However, he also held that the claimants had satisfied the threshold condition in CPR 31.17(3)(a) in relation to the documents sought from the Treasury. Tomlinson J did not make an order for disclosure against the Treasury as he had not yet considered, nor been asked to consider, whether the threshold condition in CPR 31.17(3)(b) had been met or whether the court’s discretion should be exercised.

Relevant rule
CPR 31.17(3) provides as follows:

The court may make an order under this rule only where –

(a) the documents of which disclosure is 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.

The claimants appealed the judge’s decision that the Bank wasn’t in control of the documents, whilst the Treasury appealed the decision that threshold condition (a) had been satisfied.

The Court of Appeal rejected the Treasury’s arguments in relation to the threshold condition and held that the word “likely” in CPR 31.17(3)(a) did not mean “more probable than not” and the proper meaning was merely “may well”. In considering classes of documents sought by the claimants, the Court of Appeal held:

  • each individual document in the class must meet the threshold condition;
  • documents which do not meet the threshold condition cannot be included just because they are in a class which also includes documents which do meet the condition;
  • when applying the test to individual documents (ie determining whether each individual document is likely to support the case of the applicant or adversely affect the case of another party), each document has to be read in context so that a document read in isolation may not appear to satisfy the test, but may do so if viewed as one of a class of documents;
  • there is no objection to an order for disclosure of a class of documents provided the court is satisfied that all the documents in the class do meet the threshold condition; and
  • if the court is satisfied that each document in a class of documents (viewed individually and as members of the class) do meet the condition, then “it is immaterial that some of the documents in the class will turn out, in the event, not to support the case of the applicant or adversely affect the case of one of the other parties”.

The Court of Appeal also rejected a further argument by the Treasury that the claimants had failed to adduce evidence that the documents satisfied the threshold condition. The Treasury’s appeal was therefore dismissed and the Court of Appeal held that Tomlinson J had applied the correct test and that the test in threshold condition (a) had been met.

As the Treasury’s appeal was dismissed, the claimants did not pursue their appeal of the decision that the Bank was not in control of the documents. Nevertheless the Court of Appeal stated it agreed with Tomlinson J’s decision on this issue.

The courts will not of course allow litigants to embark on fishing expeditions for documents. However, the decision clarifies that a non-party can be ordered to provide disclosure so long as the documents held by that party and requested by the applicant “may well” support the applicant’s case or adversely affect that of his opponent.

The judgment also confirms the approach the court will take to disclosure of documents in a class: in particular, that they may be read in context when deciding whether or not they satisfy the threshold condition for non-party disclosure (see also American Home Products Corporation v Novartis Pharmaceuticals UK Ltd [2001] EWCA Civ 165).

In summary, the Court of Appeal has clarified that the threshold which has to be satisfied is lower than that previously thought to be the case by many practitioners. The result of this decision is that the procedure under CPR 31.17 is likely to be invoked more often as a method of obtaining documentary evidence.

© Herbert Smith 2002

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

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