Pre-Action Disclosure

Bermuda International Securities Ltd v KPMG (A Firm) (CA TLR 14 March)

CPR rule 31.16 provides for disclosure of documents to be made before proceedings start where the respondent and the applicant are likely to be parties to the proceedings and where, if proceedings had started, the respondent’s duty by way of standard disclosure would extend to the documents of which the applicant sought disclosure. It was not appropriate at this early stage in the life of the new rule to lay down guidelines. Orders for pre-action disclosure were appropriate in a vast range of cases, it being for judges in their case-management role to work out the circumstances where such an order would assist in resolving the dispute and, if it would, whether it was desirable for the order to be made. The court had to be clear what the issues in the litigation were likely to be and to make sure that the documents asked for were ones which would adversely affect the case of one side or the other, or support the case of one side or the other. The court then had to form a view whether the case was one in which pre-action disclosure was desirable for one of the reasons set out. The word ‘desirable’ brought into play the balancing exercise that time and again judges would have to exercise in carrying out their case management powers under the new rules. The application had been unreasonably resisted in the present case and the judge had therefore been entitled to refuse to order Bermuda International to pay the costs of the application, despite the presumption in CPR rule 48.1 that the applicant would pay such costs. However, it was important to recognise that in relation to pre-action disclosure the costs of the actual exercise should be paid by the applicant for that disclosure. Accordingly the judge’s order was varied so as to order Bermuda International to pay for the exercise of producing the documents.