Last month, I wrote about the risks businesses face in losing legal privilege in documents during litigation, resulting in the obligation to disclose them. This month, I’m taking a look at whether you can use documents disclosed to you by your opponent for other purposes than fighting that claim – for example, in a closely related, but separate claim.
This issue was one I dealt with for a client last year. My client was suing two professional advisers, who had both been retained to act on a construction project. My client alleged that both had been negligent, causing loss. The two professionals were sued separately, but many of the facts – and relevant documents – were the same in each claim. During disclosure, one of the professionals disclosed some emails that compromised the defendant in the parallel claim. Could we have applied to the court for permission to use those documents against the other professional? At the time, I felt that the answer was “no”.
Parties to litigation are subject to an implied undertaking not to use a disclosed document for a purpose other than the proceedings in which it was disclosed. This common law principle is reflected in the Court Procedure Rules, which say, very clearly and firmly, that one may only use disclosed documents if the court or the person who has disclosed the document (and the owner of the document, if different) says you may; or if the document has been read aloud or referred to in open court. There is a very good public policy reason for this rule. Litigation in this country is conducted “cards on the table”, which means that parties to litigation must disclose relevant documents freely and co-operatively in accordance with the Court Rules. The risk that those documents might find their way onto the front page of a national newspaper, or be used to fight another claim, would be a big disincentive to a frank disclosure process.
The courts have been at pains to uphold this principle. The courts have tightly constrained the circumstances in which documents can be used for a collateral purpose and have defined “using” a document very widely. “Using” a document has been held to include reading a document, copying it, showing it to somebody else (such as the judge) and using the information contained in it. It also extends to referring to the document and any of its characteristics, including its provenance.
However, there are instances when the court will give permission for collateral use of documents. A good example is IG Index Ltd v Cloete  EWCA Civ 1128. Cloete, having been sacked, brought a claim for unfair dismissal in the Industrial Tribunal and during that claim, disclosed a USB stick holding IG’s confidential documents. IG brought separate High Court proceedings for return of the documents and referred to their existence in its application. The court held that it should have first asked for permission to “use” i.e. refer to the documents, but permission was granted retrospectively allowing IG’s claim to proceed.
Most recently, in Tchenguiz and another v Grant Thornton UK LLP and others  EWHC 310 (Comm) Grant Thornton sought the court’s permission to review documents disclosed to it in a similar case (both cases arose out of the collapse of the Icelandic Kaupthing Bank HF in 2008) in order to see whether those documents ought also to be disclosed in this case to the claimant, Tchenguiz. The judge decided that permission should be granted if the collateral purpose was to advise on whether other proceedings would be possible, or would be further informed.
So would Tchenguiz 2017 have made a difference to the client I was advising last year? My view is that it would not. There is a significant and important difference between using documents to see whether it would be possible to bring a claim, or to “inform” another claim; and using documents merely to improve one’s prospects of winning another claim.