Court provides guidance on role of solicitors overseeing disclosure process

In IBM United Kingdom Ltd v LzLabs GmbH & Ors [2023] EWHC 2142 (TCC) the Court emphasised that variations to an extended disclosure order will only be permitted under paragraph 18 of Practice Direction 57AD where it is reasonable and proportionate in the context of the case. The judgment also provides helpful guidance to solicitors who are overseeing but not actively participating in each stage of the disclosure exercise.

Background

The claimant, IBM, brought a claim for injunctive relief and damages against five defendants for breach, or procured beach, of a license agreement entered into with the second defendant in relation to IBM software. The defendants disputed the claims, and counterclaimed for injunctive relief, declaratory relief, damages, and specific performance.

Following the order for disclosure and during trial preparations, the claimant made an application to court for an amended extended disclosure order. This required the defendants to (i) add 20 additional custodians to the list in the agreed and approved Disclosure Review Document (increasing the custodial documents by around 400,000 documents) and (ii) identify email distribution lists used by the first and third defendants and provide details of the recipients of each list. The defendants challenged the application on the basis that the documents were not necessary for the just disposal of the proceedings, and the order would result in significant additional cost and delay to the trial timetable.

The defendants also brought their own application for an order that the claimant must serve a witness statement from a senior officer of the claimant to provide details of the individuals from the claimant who undertook certain disclosure searches and a full explanation of how the search, selection, review and extraction of certain documents was undertaken. Further, the claimant should serve Disclosure Certificates signed by each of those individuals.

Decision

Request to vary extended disclosure order

In deciding the claimant’s application, the court considered what would be reasonable and proportionate having regard to the overriding objective and the factors set out in paragraph 6.4 of Practice Direction 57AD (such as the likelihood of documents existing that will have probative value, and the ease and expense of searching for documents). Given the likely probative value of the documents sought, the existing disclosure, and that two new allegations identified by the claimant had not been the focus of earlier disclosure, the Court held that a reasonable and proportionate amendment would be to add 4 out of the 20 proposed additional custodians.

In contrast, the part of the application in respect of the email distribution lists was rejected by the Court. The defendants had already given details of current distribution lists and an order for historic lists with details of who was added and removed would be “unnecessary and oppressive”. The Court commented that as the e-mail distribution lists were not said to be relevant documents in their own right, but rather to reveal the individuals who were in receipt of relevant information, the application had “all the indications of a trail of inquiry, as might be provided for under extended disclosure Model E”. Model E is only ordered by the court in “exceptional circumstances,” and none had been shown in this case. The Court reasoned that the claimant had already benefited from very extensive disclosure.

Details of claimant’s disclosure process

The Court rejected the defendants’ application for further details of the claimant’s disclosure, which it considered to be speculative and without merit in the absence of any gaps or errors in the claimant’s disclosure.

The Extended Disclosure Certificate had been signed by the partner in the law firm representing the claimant. The partner had also provided a witness statement setting out details of the individuals at the claimant who had carried out the document searches, and confirmation that certain searches had been conducted. The defendants’ counsel accepted that he could not go so far as to say that the disclosure was carried out contrary to the court's order but expressed concern that the partner had signed the extended disclosure certificate stating that he was responsible for overseeing the process in circumstances where he did not actively participate in the document extraction exercise. This had been carried out by sixteen employees from the claimant. The Court concluded that "this is not a proper basis on which to seek to go behind the disclosure certificate signed by a solicitor with conduct of the case. The CPR does not require a solicitor overseeing disclosure, particularly on the scale of these proceedings, to be physically present and actively supervise every stage of the exercise.”

Key Takeaways

This case is a reminder that under Practice Direction 57AD, there is no automatic right to extended disclosure and that the courts will not entertain extended disclosure requests being made for unnecessary and speculative enquiries. The guiding principles of reasonableness and proportionality remain key, and in such applications the courts will continue to have regard to pragmatic and relevant factors, including time, costs, and previous disclosure efforts.

The judgment also provides helpful guidance to solicitors working on cases where the client leads certain stages of the disclosure process (for example the collection and extraction of documents) and confirms that the CPR does not require a solicitor overseeing disclosure to be physically present and actively supervise each stage of the disclosure.

With thanks to Aysha Ahmed for her assistance in preparing this post.