Disclosure in UK civil proceedings, with or without an “e” at the front of “disclosure”, is not a game for amateurs, raising serious points about the strict interpretation of a deceptively simple-looking rule as well as practical considerations – and that is before you get to the technology. If UK lawyers can learn something from Shah v HSBC Private Bank, US litigators will see one reason why UK disclosure is so much narrower in scope than the bloated excesses of US discovery.
I am obliged to Ashurst for the case summary which tipped me off to the judgment covered here. The case is Shah & Anor v HSBC Private Bank (UK) Ltd  EWCA Civ 1154 (13 October 2011). The claim itself concerns a delay in banking transactions which occurred because the bank suspected money-laundering and felt obliged to make authorised disclosures under the Proceeds of Crime Act 2002.
The application which came before the Court of Appeal concerned disclosure under the Civil Procedure Rules. Two questions arose: did the bank’s standard disclosure obligations require it to reveal the names of the bank employees who were involved? If they did, was it entitled to preserve that anonymity by redacting those names on the ground of public interest immunity?
The court (the main judgment is from Lord Justice Lewison) found for the bank on a strict interpretation of Rule 31.6, the definition of standard disclosure; the PII point effectively dropped away.
The paragraphs numbered down to 18 are a recital of the underlying facts. The claimants wanted to know the names of the individual employees involved in complying with the POCA requirements and with the bank’s internal procedures. The question arose as to whether this information was “relevant” although, as we shall see, this is in fact the wrong question.
It is clear to anyone who reads the rules, although not, apparently, to many lawyers responsible for giving disclosure in civil proceedings, that the broad pre-CPR test of “relevance” is not the right test under CPR 31.6 (this is not a dig at the parties to this case, incidentally; you don’t get to the Court of Appeal without a serious point to argue about).
Relevant is irrelevant to standard disclosure is the heading to an article which I wrote explaining this in April 2008, covering much the same ground as does the Court of Appeal in this case, including (at paragraph 32 in the judgment) Lord Woolf’s analysis of document categories which led to the replacement of the old Peruvian Guano test by the narrower test in Rule 31.6. That recital emphasises, as I did in my article, that what went overboard was the old train of enquiry test – “documents which may lead to a train of enquiry enabling a party to advance his case or damage that of his opponent”. Like the abandonment of “relevance”, the policy here was to narrow the scope of standard disclosure.
The standard disclosure test, set out in paragraph 24 of the judgment requires a party to disclose any documents which (I summarise – the actual Rule is here) are supportive of or adverse to his case or the case of any other party. The policy aim, as I say, was to reduce the amount to be disclosed and it is this, amongst other things, which explains why the UK does not have the very broad, and often unnecessarily broad, discovery which is required under the US rules. This valuable definition was accompanied by the pointless gesture of relabelling the entire process and calling it “disclosure”.
As the judgment observes, the word “relevant” does not appear in Rule 31.6 but the word “only” does. That narrow “supportive or adverse” definition does not give a party merely the right to focus the disclosure task, but the duty to do so. The rest of paragraph 25 is worth quoting:
While it may be convenient to use “relevant” as a shorthand for documents that must be disclosed, in cases of dispute it is important to stick with the carefully chosen wording of the rule. Thus in my judgment the first of the questions ventilated before the judge was not quite the right question”.
In other words, the question “are the names of the employees relevant?” should in fact have been phrased “is identification of the employees something which is supportive of or adverse to the case of the bank or any other party?”
In the Shah case, the bank had in fact disclosed documents which named the employees, but had redacted the actual names. That led to a discussion (which you can read for yourself) about the bank’s election, implicit in their concealment of the employees names, to limit their witness evidence on this point to the one nominated officer who was named. The fact that this may, in due course, weaken the bank’s case or result in adverse inferences does not give the claimants any additional right at the disclosure stage to go behind the strict definitions in the rules.
The principal conclusion of the Court of Appeal appears in paragraphs 49 and 50, whose material parts read:
The more I listened to the explanation of why the claimants wanted the names, the more convinced I became that, to use the familiar cliché, this was a fishing expedition……In my judgment the identification of the individual employees of the bank is at best something that might lead to a train of inquiry that might adversely affect the bank’s case. Disclosure of the information might have been appropriate under the Peruvian Guano test (although I am not saying that it would have been), but in my judgment it does not meet the more stringent requirements of Pt 31.6 of the CPR.
I have stripped this explanation of the curious wrinkle that a bank employee had approached the customer, now the claimant, for a very large loan. Lord Justice Pill (from paragraph 54) expands on an earlier brief reference to this odd reversal of the normal relations between bank and customer. Even this, the judge said, “unpromising though the background may be from the point of view of the bank”, did not counter the express and narrow provisions of Rule 31.6.
The judgment is important as a reminder that Rule 31.6 is a narrow test, that the word “only” was put in there for a purpose, and that a party seeking broad disclosure must get over the “supportive or adverse” hurdle if that is the ground of resistance. There is a point of view which is not to be ignored to the effect that the giving party is, as a result, put to a more onerous task of selection which itself takes time and costs money; this must be set against the benefit, for both sides, of the narrow disclosure which results.
This judgment reaches public attention (I, for one, missed it when it was published at the end of last year) at the same time as the West African Gas Pipeline judgment in which a disclosing party was punished in costs for failing to disclose material which should have been disclosed. Though they appear to pull in opposite directions, there is nothing inconsistent between the two judgments. Disclosure involves asking a series of questions which start with Rule 31.6 and end with the question whether the giving party has in fact produced everything it was supposed to produce. In between lie two other stages – whether the search was reasonable and proportionate, and whether the whole process can be cut down by intelligent appraisal, followed by agreement or order, that the scope of disclosure may be narrowed by asking the question “are these documents really necessary?”
The complexity of these questions as a legal and practical matter emphasise that disclosure is a specialist skill, not merely a mechanical task. The very fact that two able teams of lawyers can carry an argument about Rule 31.6 as far as the Court of Appeal shows that points of substance can arise from a relatively straightforward-looking rule. The West African Gas Pipeline case shows how the mightiest firms can come unstuck in the execution of admitted obligations. If you add to these points of law and practice the scope for saving costs by putting discretionary boundaries around the scope of disclosure, and for using technology to cut down the task whilst complying with formal obligations, it is clear that disclosure is not a game for amateurs.
By the way, US readers may have come across the expression “relevant is irrelevant” before. It is one used by Ralph Losey – you will find it most recently in his article Ethics of Electronic Discovery – Part One, and I sent him my old article only last week on seeing his use of the phrase. If anyone in the UK feels oppressed by the Court of Appeal’s picky emphasis on what the rules actually say, go and have a look at what happens when discovery is allowed to range free, unrestrained by questions like “what do we actually need for justice to be done”. Then you will see why I find it hard not to smile when a US lawyer opines that “US discovery is two years ahead of the UK”. So it is, of course, in much the same way as the fastest lemming is out in front in the rush for the water. We have got to rein it in, and the bare words of the rules are a good place to start.