In Soriano v Forensic News LLC & Ors[2023] EWCA Civ 223, the Court of Appeal upheld a decision refusing to grant an anti-suit injunction to restrain a US discovery application. The Defendants had applied to a US court to obtain documents held by a bank in the US, which they intended to use in their defence of the English proceedings.
The decision gives helpful guidance on the courts' approach to defendants who seek to use foreign court procedures to gather evidence to support their defence to English litigation.
Background
The Claimant sued two US based Defendants for libel. Prior to the first hearing to deal with preliminary matters, the Defendants applied to a US court seeking disclosure of documents held by a US bank connected with the Claimant. The application was made in reliance on 28 US Code s.1782. This provision permits a US court to assist in gathering evidence in support of legal proceedings in a foreign court (the "s.1782 application").
The Claimant applied for an anti-suit injunction on the grounds that the s.1782 application was "vexatious, oppressive and unconscionable" and interfered with the due process of the English proceedings. The High Court refused to grant the injunction application, finding that the application did not amount to conduct which was oppressive or vexatious, nor did it interfere with due process. The Claimant appealed on a number of grounds, including that the application was an abusive fishing expedition that was seeking to circumvent English disclosure rules.
The Court will not prevent a party from evidence gathering in a lawful manner
The Court of Appeal upheld the judge's decision and found there would be no unwarranted interference with the efficient management of the libel action. The Court noted that whether such an application is abusive is a factual evaluation and the Court of Appeal will be slow to interfere with such a factual assessment unless the judge had made a legal error.
The Court of Appeal addressed two of the grounds of appeal as follows:
- The abuse ground The Claimant's criticisms of the breadth of the s.1782 application was a matter for the US court. Although the s.1782 application was far broader than any third-party disclosure order the English court would make, the US court could control its scope.The Court of Appeal referred to US authority which noted that the s. 1782 procedure was to assist foreign courts, and a US court could take into account the nature of the foreign tribunal, including whether the application was an attempt to circumvent foreign evidence gathering restrictions. Unduly intrusive or burdensome requests could be rejected or trimmed. Further, there was nothing inherently objectionable from the English court's perspective about seeking evidence, in an appropriate case, from the party's banker or from the bankers of the corporate entities in which the party had an interest.
- The costs ground
The Claimant argued it was vexatious and abusive for the Claimant to incur costs in the US courts when the Defendants had failed to pay a costs award due to the Claimant. The Court of Appeal agreed that the non-payment of costs was a circumstance that a judge could properly have taken into account in determining the application. However, the Court of Appeal agreed with the judge that the non-payment of a costs order gave rise to domestic remedies the Claimant could pursue, and it did not make it unconscionable for the Defendants to pursue their s.1782 application. The fact that the Claimant would incur costs without the protection that would be available in the English courts was not a reason to prevent the Defendants obtaining evidence to assist their defence.
Key takeaways
Parties to English litigation are entitled to try to obtain in a foreign country, by means lawful in that country, documentary evidence which they believe they need to prepare their claim or defence.
The English courts may grant an injunction restraining a party from pursuing foreign proceedings where that party behaves, or threatens to behave, in a manner which is unconscionable.However, the court will not generally grant such an injunction where the party is seeking to use lawful means to obtain documents from abroad. (The Court was referred to only two occasions when English courts had restrained an application of the kind in dispute because it was abusive, unconscionable or vexatious.) This remains the case even if the foreign court may order disclosure on a wider basis than an English court would do.
With thanks to Doug Seale for his assistance in preparing this post.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
