17/06/2024

Each and every document: Underlining the limits on disclosure orders against a non-party

In a recent decision in the ongoing litigation between the PHG Group and Deutsche Bank, Fiesta Hotels and Resorts SL & Ors v Deutsche Bank AG & Ors [2024] EWHC 1422 (Comm), the Commercial Court has underlined the limits of the jurisdiction to order disclosure against non-parties under CPR rule 31.17.

Patrick Dunn-Walsh represented the non-party respondent, Saranac.

Background

The claim brought against the defendants (Deutsche Bank) alleges various misrepresentations that induced the claimants (PHG) to enter into numerous derivative contracts.

Deutsche Bank made disclosure applications against PHG and a non-party, wealth management firm Saranac Partners Limited (Saranac), seeking disclosure of all recordings of conversations between PHG and Saranac over a particular time period. The advice provided by Saranac regarding derivatives trading was said to be relevant to PHG’s sophistication and understanding of derivative trading contracts.

Decision

Dame Clare Moulder dismissed both applications.

As regards the application against PHG, the judge held that PHG did not have legal or practical control of the recordings, and that in any event the disclosure sought was not reasonable or proportionate.

As regards the application against Saranac, the judge considered (at [59]) the statement of the Court of Appeal in Three Rivers (No 4) [2003] 1 WLR 210 that where disclosure of a class of documents is sought, each document in that class must satisfy the jurisdictional threshold of being likely to assist the applicant or adversely affect another party. The judge also noted (at [60]) the comments of Hollander, in Documentary Evidence (3–13), to the effect that, while some cases have applied this test generously, the jurisdiction does not extend to classes of documents that are non-homogenous or deal with different subject-matter.

On the facts, the judge held (at [65]) that the jurisdiction was not satisfied, principally because the advice provided by Saranac extended to a number of other matters well beyond the subject of derivatives trading. Therefore, she was not satisfied that (quoting the judgment in Three Rivers) “there are no documents within the class which cannot be said to be ‘likely to support … or adversely affect’” the respective parties’ cases.

The ruling provides an illustration of the limits of the jurisdiction to order non-party disclosure. In particular, it underlines that while the application of the Three Rivers test will be applied pragmatically in some cases, the jurisdiction remains an exceptional one, and the test imposed by Three Rivers (No 4) is an important limiting factor.

Patrick Dunn-Walsh was instructed by Proskauer Rose. The claimants were represented by Edward Levey KC and Max Evans of Fountain Court Chambers, instructed by Quinn Emanuel Urquhart & Sullivan, and the defendants by Alexander Polley KC and Henry Hoskins of One Essex Court, instructed by Herbert Smith Freehills.