High Court Decision Emphasizes Control and Proportionality in Disclosure Issues in Commercial Litigation Case

Citation: [2024] EWHC 480 (Comm)
Judgment on

Introduction

In the case of The Public Institution for Social Security v Muna Al-Rajaan Al-Wazzan & Ors, the High Court of Justice provided a detailed judgment concerning numerous disclosure issues within the realm of commercial litigation. The case analyzes intricate matters such as the practical control over documents, the application of the rules around disclosure, and legal representation, inter alia. This article aims to elucidate the key legal principles applied in the decision and how they relate to the various facets of the case presented before the court.

Key Facts

The case revolves around allegations of unlawful secret commission payments within the span of roughly two decades, involving various financial institutions and intermediaries, with a focus on the conduct of Mr. Al Rajaan, the former Director General of the Plaintiff, PIFSS. The claimants allege that commissions paid were in excess of US$874 million. Consequently, extensive case management and disclosure exercises had taken place, with disputes arising over the adequacy and extent of disclosure especially considering documents held by third parties, some governmental and some non-governmental.

Several legal principles were central to this judgment:

  • Disclosure Control: The concept of ‘control’ played a pivotal role in determining a party’s obligation to disclose documents. The court delineated that for documents to be within a party’s control, there must be a legal right to obtain the documents and/or a practical arrangement enabling access to them, even without a legal right.

  • Practicality and Proportionality: The courts applied the principle of practicality and proportionality as outlined in Practice Direction 57AD. Orders for extended disclosure should consider the relevance, extent, and practicality of retrieving documents, balanced against the importance of the case and costs involved.

  • Disclosure Process Scrutiny: Strict adherence to the disclosure process was emphasized, with only limited circumstances allowing the court to ‘go behind’ a disclosure certificate. The court must be satisfied of a genuine need for intervention based on evidence of potential non-compliance.

  • Third-Party Documents: The court reiterated that there is no obligation for a party to seek third-party documents if there is no evidence of control. Moreover, the judgment from Various Airfinance was upheld, stating that the court lacks the jurisdiction to compel a party to make efforts to obtain documents from third parties beyond its control.

  • Professional Advisers’ Working Papers: The ownership of working papers by professional advisers was discussed, emphasizing that these remain the property of the professionals and not the clients, based on the principles from the Faraday case.

Outcomes

The Court decided against the broad disclosure orders sought by the defendants, based on the notion that the plaintiff, PIFSS, did not have practical control over the documents of various third parties in question. The applications were either dismissed or tailored to a more specific, reasonable, and proportionate scope. For instance, while the Court found it reasonable to add certain individuals as custodians for the disclosure process, it refused to mandate broader searches or compel PIFSS to obtain documents from various government entities or professional advisers like KPMG and EY.

Conclusion

This case underscores the nuanced approaches adopted by the UK courts in disclosure exercises within commercial litigation. It reaffirms that document control for disclosure is not merely determined by legal or commercial relationships but requires more compelling evidence of practical arrangements providing access to documents. The decision emphasizes strict scrutiny of the disclosure process and honors the principle of proportionality, ensuring that the search for truth in litigation is balanced against practical limitations and cost considerations.

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