High Court Emphasizes Proportionality and Co-operation in Complex Financial Disclosure Disputes

Citation: [2024] EWHC 85 (Ch)
Judgment on

Introduction

In the case of The Federal Deposit Insurance Corporation v Barclays Bank PLC & Ors, the High Court of Justice Business and Property Courts of England and Wales Financial List (ChD) heard a complex matter involving disclosure issues in the lead-up to a major trial concerning allegations of USD LIBOR rate manipulation. Mr. Justice Miles presided over the fourth CMC, reviewing a series of disclosure-related applications brought by the claimant against multiple banking defendants. The judgment provides an insight into the court’s handling of disclosure disputes in the context of both specific applications and broader procedural compliance within complex financial litigation.

Key Facts

The claimant, acting as the receiver for 19 closed US banks (Closed Banks), alleged that the defendants colluded in the suppression of the USD LIBOR rate. The initiation of proceedings in English courts followed a prior US court decision lacking jurisdiction over non-US Panel Banks. While standard disclosure had been completed by the claimant and the BBA, the bank defendants (BDs) disclosed a first tranche from US proceedings and supplemental productions in line with US court orders or agreements. The claimant sought further specific disclosure from the BDs, focusing on key categories, voice data, transactional data, and extending the date range for disclosure.

The judgment explored several legal principles as they applied to disclosure in complex financial litigation. The court emphasized the role of proportionality in evaluating the scope and extent of disclosure, a principle deeply entrenched in CPR 31 and PD 31C governing competition cases. Additionally, the judgment highlighted the parties’ duty to co-operate in promoting the overriding objective, necessitating constructive discussions and pragmatic negotiations in determining the need and scope of disclosure.

In rejecting the claimant’s applications, Mr. Justice Miles applied the following legal principles:

  • Proportionality and Necessity: Courts should not order disclosure when it would be disproportionate to the matters at stake. The requested disclosure must be necessary for disposing fairly of the claim or saving costs.

  • Early Disclosure Requests: It is premature to request widespread disclosure without narrow, expert-informed requests. Appropriate disclosure requests should follow informed discussions, particularly with expert evidence available.

  • Co-operation among Parties: The duty of parties to co-operate in litigation is emphasized, and co-operative engagements are preferred as an initial step before seeking court intervention.

  • Disclosure Data Requirements: Practice Direction 31D was invoked with respect to the voice data application, yet it was interpreted to not require parties to undertake extensive efforts to identify participants in audio files where metadata is not readily available.

  • Procedural Efficiency: The decision tackled the efficient and practical progression of large-scale litigation, guiding the strategic approach to disclosure toward the effective administration of justice.

The principles cited in The RBS Rights Issue Litigation [2015] EWHC 3433 (Ch) and Coll v Google [2023] CAT 72 were also considered, notably around focused approaches to disclosure and the need for parties to provide clarity about the searches performed.

Outcomes

  • Disclosure Applications: All applications made by the claimant related to the Key Categories, Voice Data, and Transaction Data were, on balance, rejected by the court on grounds of their disproportionate nature, lack of clarity, and failure to demonstrate necessity at the current stage of proceedings.

  • Expert-Informed Discussion Requirement: The court mandated that expert-informed discussions should precede any targeted disclosure application to enable the court to be better equipped with more concrete evidence upon any subsequent litigation.

  • Guidance Not Binding Orders: The court offered pragmatic guidance rather than binding orders on parties to attempt identification of participants in audio files and to co-operate in expert discussions regarding data disclosure need.

  • Refinitiv Application: The court did not address this application as it was not moved by the claimant.

Conclusion

The judgment in The Federal Deposit Insurance Corporation v Barclays Bank PLC & Ors reflects a cautious approach by the court in managing disclosure in highly complex financial litigation. The primary consideration for the court was the need to ensure proportionality and necessity in disclosure without imposing undue burdens on the defendants. The judgment further reinforced the imperative of pre-trial co-operation between the parties and the utilization of expert evidence to guide disclosure requirements. The case is leading towards a trial with a focus on strategic disclosure, judicial efficiency, and party responsibility to avoid unwarranted litigation encumbrances.

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