Overview
The English courts have been busy during the first part of 2018. The Supreme Court has revisited the issue of service of a claim form once again, providing useful tips for claimants. Disclosure, often the most costly part of the litigation process, has also been the subject of further case law, in particular how e-disclosure should be managed. At the end of this newsletter, we provide an update on a new disclosure pilot scheme. The courts have revisited issues relating to freezing injunctions and security for costs, two important tools in a litigator's armoury. There has also been a case on the English courts' approach to dealing with letters of request, a useful support for foreign proceedings where documents and witnesses are located within the jurisdiction of the English courts.
The Asbestos Victims Support Groups Forum (UK) v Cape Distribution Limited & Ors [2017] EWHC 2103 (QB)
Non-party entitled to access to documents filed at court
Master McCloud has held that documents "filed" on the court record which are read in court can be accessed by non-parties provided the non-party has a legitimate interest. Documents on the record of the court which are not read in court are subject to a more stringent test, namely, there must be strong grounds for thinking that access is necessary in the interests of justice.
The principle of open justice is engaged even if a case settles before judgment. In this case, filed paper bundles were records of the court. However, a bundle provided solely in electronic form via a document management system (and which contained disclosed documents) was not a bundle filed at court, and so did not fall within the scope of CPR r5.4C "because 'filing' required delivery to the court office and in any event CPR 5.5 provided that a 'practice direction may make provision for documents to be filed or sent to the court' by electronic means and there was no provision for electronic filing of bundles".
It was irrelevant that the parties had agreed a confidential settlement. This point should be borne in mind when documents are filed at court. If documents other than statements of case have been filed at court (and filing does not include providing documents in electronic form, where no order for electronic filing has been made), they may be vulnerable to an order allowing access to non-parties even though they are later made the subject of confidentiality obligations as between the parties themselves (and even though they may not have been read in court).
John Michael Sharp v Sir Maurice Victor Blank [2017] EWHC 3390 (Ch)
Court considers revision of a costs budget and the meaning of a "significant development"
Costs budgets cover costs to be incurred (not costs already incurred). PD3E para 7.6 provides that "Each party shall revise its budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions ... The court may approve, vary or disapprove the revisions having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed".
This case involved seven claims that were subject to a group litigation order and the claimants applied for a costs management order. Total budgeted costs amounted to just under £37 million. The defendants subsequently asserted that certain significant developments required them to revise their budget and the claimants refused to agree to the revisions.
Chief Master Marsh held that the court has jurisdiction to revise a budget taking the last agreed or approved budget as the base reference point: "Costs which have been incurred since the date of the last agreed or approved budget (or the antecedent date) that relate to significant developments are, for the purposes of revision, placed in the estimated columns of the revised Precedent H in one or more phase. In some cases, it may not be obvious where they go (for example a late application for security for costs) but I can see no reason why Precedent H may not be adapted as necessary to accommodate work that does not easily fit in".
The following factors were found to be "significant developments" in this case: (a) the trial timetable had been extended by a total of 48 business days; (b) an application for specific disclosure had resulted in a large number of documents that had to be reviewed; and (c) the claimants had served an expert's report which was a change from the agreed basis upon which expert evidence was to be provided. However, the following factors were found not to be "significant developments": (a) the claimants' application for third party disclosure; (b) questions put to the defendants' experts by the claimants; and (c) modest adjustments to the claimants' case following a change in approach by the claimants' expert.
Triumph Controls UK Ltd & Ors v Primus International Holding Co & Ors [2018] EWHC 176 (TCC)
Judge criticises unilateral decisions taken by a party during the disclosure process and orders a fresh manual review
The defendants sought two orders from the court following the claimants' disclosure: (1) an order that the claimants provide a list of 860,000 folders and file paths to the defendants so that they could identify whether any additional folders or file paths ought to have been searched; and (2) an order that the claimants undertake a manual review of the balance of 220,000 documents (out of a total of 450,000) which had been identified as potentially disclosable following a keyword search. The parties had agreed on keywords but the claimants had unilaterally used a Computer Assisted Review ("CAR") to conclude that only 0.38% of these documents would be relevant
The first order was refused by Coulson J. Although the claimants had acted without consulting the defendants (and it would have been better to have consulted), the process had been clearly set out in the claimants' original list of documents and so the defendants had had 17 months to raise this complaint. In any event, this method had been sensible and proportionate on the facts, especially as the defendants had been unable to identify any obviously missing folders/file paths.
In relation to the second order, Coulson J held that both the CAR exercise and the sampling exercise that it produced, had not been transparent or independently verifiable. The Electronic Documents Questionnaire had referred to a manual review of all documents and "At no time have the claimants provided relevant details as to how the CAR was set up or how it was operated. In circumstances where the decision to use the CAR was unilateral, and where the defendants had no input into it at all, that is unsatisfactory". It was also not apparent that there had been any overseeing senior lawyer. The judge ordered the parties to agree a methodology by which a sample of 25% of the 220,000 documents would be manually searched. That search was to take no longer than three weeks.
Cyprus Popular Bank Public Co Ltd v Vgenopoulos & Ors [2018] EWCA Civ 1
Court of Appeal confirms that freezing order obtained abroad can be registered and served in England pending an appeal against registration
A bank commenced proceedings in Cyprus and obtained a worldwide freezing order from the Cypriot court. It then registered that freezing order as a judgment of the English High Court (pursuant to Article 38 of the Judgments Regulation (EC Regulation 44/2001)). The first novel issue in this case was whether the worldwide freezing order became immediately effective and fully enforceable in England or whether it only became effective and fully enforceable if no appeal was brought in respect of the registration order within two months (or, if an appeal was brought, once that appeal was determined). The Court of Appeal held that the order was immediately effective and enforceable.
The second issue was what was meant by "measures of enforcement" as referred to in Article 47(3) of the Judgments Regulation. Article 47(3) provides that during the time specified for an appeal against registration, no "measures of enforcement" may be taken. The issue in this case was whether it meant the processes in which the court is involved in securing enforcement, or whether it also included service of the worldwide freezing order and/or notification of the order to third parties. The Court of Appeal favoured the argument that, as a question of English law, "enforcement" of a judgment entails the invocation of the process of the English court. However, it did not need to decide the point because it also held that service/notification are not "measures of enforcement" prohibited by Article 47(3) (even if they contain a penal notice).
PSJC Commercial Bank Privatbank v Kolomoisky & Ors [2018] EWHC 482 (Ch)
Judge rules on what must be disclosed by the respondent following the grant of a freezing order
A worldwide freezing order ("WFO") granted against the respondents contained the standard disclosure obligation to inform the applicant in writing "of all his assets exceeding [here, £25,000] in value as at the date of this order, giving the value, location and detail of all such assets." The WFO defined the term "assets" as including a chose in action (broadly, a right to sue another party), although it did not give any guidance as to what had to be provided in relation to a chose in action. The respondents had made various loans and the applicant argued that full disclosure of these had not been given, in particular whether the debtors were likely to be able to repay.
The judge noted that an asset disclosure order should only be made for the purpose of policing, or giving effect to, the WFO and should not go beyond information that is necessary for that purpose. Confidentiality does not entitle the respondent to withhold information. She accepted that the court has jurisdiction to make the order (which might include disclosure of documents), where "such an order is required to enable a claimant, first, to identify the nature and extent of a defendant's interest in assets, and second, to decide whether and, if so, what further steps it should take to protect its position, such steps being an important aspect of its ability to police the freezing order".
The judge refused to order disclosure of loan documents and drew an analogy with details of a bank account: "In such a case the court would require disclosure of the bank's name and location, the name or names in which the account is held, the account number and the balance in the account, which is the asset for these purposes. What the court will not do is order the provision of bank statements. They contain details about the asset but they are not details necessary to understand the nature of the interest in the asset or to enable the freezing order to be policed".
The judge was prepared to order disclosure of the date on which each contract was entered into and the nature of the goods sold or services provided under the contracts. Such basic information fell within the scope of "details" for the purposes of the WFO. The date of repayment was also a detail which was directly relevant to the value of the chose in action and thus within "location, value or details". The applicant was further entitled to know whether the repayment of monies due was secured and the estimated value of any such security. However, although information about payments made to date had to be given to the applicant, the respondent was not required to provide details of future payments.
Allergan, Inc v Amazon Medica [2018] EWHC 307 (QB)
Judge sets aside order made pursuant to a letter of request from a US Court
This was an application to set aside an order made by a master pursuant to a letter of request issued by a US court requiring the UK applicant to provide oral evidence and documents.
Cockerill J confirmed that the first step when considering a contentious letter of request is to keep an eye on the underpinning jurisdiction: "In other words, when talking of compelling oral evidence the comparator is with when a witness summons would be available in proceedings in the English Court". A two-stage test has been laid down in the case of First American Corp v Sheikh Zayed Al-Nahyan [1999], namely: (i) whether the intended witness can reasonably be expected to have relevant evidence and (ii) whether there is an intention to obtain evidence for use at trial. Unless the US court has considered the English approach and confirmed that the evidence sought is relevant to issues for trial, the English court is free to scrutinise the request: "It is not the same thing at all ... when a court issues a letter of request without the defendant being heard, or when the Court itself says nothing about relevance but simply records the submission of the applicant".
Here, the letter of request was issued following an unopposed paper application. Although the judge accepted that it could not be said that no consideration of the merits would ever eventually take place in the US, he went on to find that the timeline gave pause for thought: "Here we are looking at a stage even before the pre-trial discovery stage. There are as yet no defined issues; because there is no pleading from the Defendant... Thus it is clear that a part of the purpose of this Letter of Request is investigatory and therefore impermissible".
The judge concluded that the English court had no jurisdiction to make the order and the order was set aside. However, he accepted that it was possible, in principle, for a letter of request issued at such a stage to meet the relevant test. This case re-affirms that a letter of request should not be treated as a wide-ranging "fishing expedition", which is investigatory, rather than being aimed at obtaining evidence.
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