In a recent judgment, the High Court saw an application made by the liquidated company, Carillion, against its former auditors, KPMG, for pre-action disclosure. This was in the context of a threatened claim for professional negligence relating to KPMG allegedly failing to detect that certain financial statements were unreliable, and the application was made with a view to obtaining what it said were key documents, before then bringing its claim. Whilst it may be that Carillion still bring the negligence claim, the Court notably refused their application.

Our analysis below centres on the principles that underpin pre-action disclosure applications and how the Court interpreted them in this case, exercising its discretion against the 'big picture'.


The intended action against KPMG arises from the much-publicised collapse of Carillion. KPMG are accused of failing to detect and inform Carillion that its various financial statements did not reflect its true financial position. Solicitors representing them indicate in pre-action correspondence that KPMG, in the disposal of its duties, failed to give proper consideration to:

a) Contract Revenue; and

b) The carrying value of goodwill.

Hence, in its application, Carillion asked the Court to make an order for pre-action disclosure of all documentation relating to these two aspects.

What does the law say?

Under Section 33(2) of the SCA 1981 or Section 52(2) of the CCA 1984, the Court has the power to order a potential party to subsequent proceedings to disclose documents on the application of another potential party to those proceedings in circumstances set out in CPR 31.16.

As summarised by Blair J in the case of Assetco1, CPR 31.16 provides that the Court may make an order for pre-action disclosure only if certain conditions are satisfied:

I. The Respondent and Applicant must both be likely to be parties to subsequent proceedings.

II. It is not however necessary to show in addition that the initiation of such proceedings is itself likely2.

III. The documents sought must fall within the scope of the standard disclosure the Respondent would otherwise have to provide in the anticipated proceedings3. It follows that, at the time of the application, the issues must be sufficiently clear

to enable this requirement to be properly addressed.

IV. Disclosure before proceedings have started must be desirable:

  • To dispose fairly of the anticipated proceedings
  • To assist the dispute to be resolved without proceedings; and/or
  • To save costs4.

V. In considering whether to make an order, among important considerations, the following must be factored in:

a) the nature of the loss complained of

b) the clarity and identification of the issues raised by the complaint,

c) the nature of the documents requested,

d) the relevance of any protocol or pre-action inquiries; and

e) the extent to which the complainant is able to make his case without the pre-action disclosure (Black v Sumitomo Corp at [88]).

VI. Finally, the anticipated claim must have a real prospect of success.

The issues

The majority of the various conditions under CPR 31.6 were agreed as having been complied with - however, two issues persisted and it was only these that came before the Court. These two issues being whether:

  1. The documents sought by Carillion fell within the scope of standard disclosure (CPR 31.16(c)); and
  2. Whether the pre-action disclosure was desirable in order to assist in the fair disposal of the anticipated proceedings Carillion sought to bring and/or would either help the dispute to be resolve without proceedings and/or save costs (CPR 31.16(d)).

Issue one - Were the documents sought within the scope of standard disclosure?

On the first of these issues, the Judge found that, with reference to the Court of Appeal's decision in Bermuda International Securities Ltd v KPMG [2001], it was more likely than not that, Carillion's request for documents was within the scope of standard disclosure in relation to the issues likely to arise.

Issue two – Was the pre-action disclosure desirable to dispose fairly of the anticipated proceedings or to assist the dispute to be resolved without proceedings; and/or to save costs?

On this issue, the Judge identified that the Courts have often in the past held that, because pre-action disclosure will enable the pleadings to be more focused (and because this will help to avoid the costs and complexities caused by later amendments), applications for pre-action disclosure should generally be looked upon sympathetically.

As such, applying that logic to the present case, it might be said that the appropriate test under CPR 31.6 had been passed.

The decision

However, and interestingly, the Judge took a different view and confirmed that, whilst pre-action disclosure would undoubtedly help Carillion particularise its claim, due consideration needed to be given to the extent of the disclosure being requested and the burden that its early disclosure would place upon the defendant. The Court determined that KPMG would be put to disproportionate effort relative to the benefit that Carillion would gain from obtaining the documentation now, rather than at the duly appointed time in the procedural timetable.

As to the anticipated claim itself, the Judge noted that Carillion had access to its own records, which were clearly sufficiently detailed to have enabled them to compile very comprehensive pre-action correspondence. As such, there were serious question marks as to whether pre-action disclosure was in any way essential in this case, as had been suggested. The Judge, having determined that no other special factors existed in this case to justify overriding the above concerns (for example such as KPMG having failed to engage with the pre-action process), therefore ordered against Carillion and dismissed its application.


This is a significant decision for Defendants, and appears to correct a growing judicial trend of favouring pre-action disclosure applications in the name of facilitating the 'big picture'. This case can now be used by Defendants in appropriate cases to remind the Court that pre-action disclosure orders ought to remain the exception rather than the rule.

In addition, that, if a Claimant already possesses sufficient documentation to articulate the claim adequately in the pre-action environment, pre-action disclosure ought rarely to be merited.


1 Assetco plc v Grant Thornton UK LLP [2013] EWHC 1215 (Comm)

2 See both See CPR 31.16 (3) (a) – (b) and Black v Sumitomo Corp [2002] 1 WLR 1562 at [71 – 72], Rix LJ

3 See CPR 31.16 (3) (c)

4 See CPR 31.16 (3) (d)

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