A "use"ful clarification of the collateral use restrictions in CPR 31.22 and CPR 32.12

In his judgment in Robert Tchenguiz and others v Grant Thornton UK LLP and others [2017] EWHC 310 (Comm), handed down today, Mr Justice Knowles has provided useful clarification of how a party which is in possession of documents and witness statements which it received in earlier proceedings should go about reviewing and disclosing those documents in new proceedings, given the restrictions on the collateral use of such documents.

The Court declined to give a declaration that reviewing, disclosing and providing inspection of such documents was not a collateral use but did grant permission to use the documents in the manner requested.

The judgment is essential reading for organisations that find themselves having to review and give disclosure of documents which have come into their possession in previous proceedings. Obtaining permission and/or consent to review and disclose such documents will be a pre-requisite to commencing the disclosure process, a task which may involve applications across multiple jurisdictions and will need to be factored into the parties’ calculations on costs and procedural timings.

Key findings

• The exercise of disclosure is crucial in achieving “real justice between opposing parties” and “the fair disposal and trial of civil actions”. Nevertheless, the importance of disclosure must be balanced against the collateral use protections imposed by CPR 31.22 and 32.12, which prevent disclosed documents and/or witness statements from being used for a purpose other than for the purpose of the proceedings for which it was disclosed.

• The meaning of the words "use" and "purpose" in the context of collateral use must not be conflated. The word "use" should be given a wide meaning that encompasses (a) reviewing documents/witness statements for relevance; (b) listing material to give disclosure; (c) providing documents/witness statements for inspection; and (d) inspecting the material with a view to deciding whether to rely on such material.

• Factors such as the level of interference represented by the review, practical considerations faced by the parties, and the presence of an obligation to review should not affect the characterisation of ‘use’ but instead, should be taken into account by the court at the permission stage.

• There is a certain limited level of implied permission in the collateral use restrictions themselves, envisaging the use of the documents (i) for the purpose of assessing whether “the document has been read by the court, or referred to, at a hearing which has been held in public”, (ii) seeking permission of the court under the rule or (iii) seeking agreement under the rule.

In this case Simmons & Simmons LLP, acting for three of the four Defendants, made an application asking the Court to decide whether it is a collateral use for a party to review, disclose and provide for inspection, documents and witness statements that had been disclosed to them in previous proceedings. In addition to these considerations, Mr Justice Knowles also considered whether the inspection (with a view to deciding whether to rely on the documents and witness statements in the current proceedings) of such documents by the Claimants was a collateral use.

The Defendants were successful in their application, to the extent that permission was granted for all stages of the disclosure process, but Mr Justice Knowles was quite definitive in his conclusion that the mere review of previously disclosed documents and witness statements fell squarely within the meaning "use" for a purpose other than the proceedings in which the documents were disclosed.

Collateral use protections

The collateral use protections, as set out in CPR rules 31.22 and 32.12, are in recognition of the fact that disclosure is “an invasion of the litigant’s right to privacy and confidentiality” (Tchenguiz v SFO [2014] EWCA 1409 [56] per Jackson LJ). The provisions that are now contained in the CPR have been described as providing a “complete code” (_SmithKline Beecham plc v Generics (UK) Ltd_[2003] EWCA Civ 1109) in terms of collateral use protections and are set out in the following terms:

“31.22(1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where -

1. the document has been read to or by the court, or referred to, at a hearing which has been held in public
2. the court gives permission, or
3. the party who disclosed the document and the person to whom the document belongs agree.

...

32.12(1) Except as provided by this rule, a witness statement may be used only for the purpose of the proceedings in which it is served.

2. Paragraph (1) does not apply if and to the extent that -

1. the witness gives consent in writing to some other use of it
2. the court gives permission for some other use, or
3. the witness statement has been put in evidence at a hearing held in public.”

Wide meaning of "use"

In his judgment, Mr Justice Knowles held that it was possible to distinguish between "use" and "purpose" by applying the words of the relevant CPR rules themselves. The meaning of the word "use" for the purpose of these rules is quite simply: use for any purpose other than the proceedings in which the documents were disclosed. He made it clear that the fact that a "purpose" was “benign or inspired by practicality or not what should be prevented” did not affect the characterisation of "use".

The Judge confirmed the wide meaning of the word "use" in this context and rejected the suggestion that the meaning given to the word use should equate to the more limited word "deployment". The Judge referred to, and indeed accepted, the particularly wide definition of "use" adopted in IG Index v Cloete [2015] ICR 254; a meaning that anticipates that tasks such as reading, copying and showing someone a document all constitute "use".

Permission

Whilst rejecting their relevance in the issue of whether the review, disclosure or inspection of documents constitutes "use", Mr Justice Knowles acknowledged that certain factors would be taken into account by a court when considering whether to grant permission for a party to "use" such documents. Factors that may be relevant at the permission stage include:

• The level of interference with the privacy of the creators or owners of the documents/statements. The more negligible the interference, the more likely that permission will be granted.

• Whether a party is under an obligation to give disclosure.

The existence of such factors in this case led the Judge to conclude that he was “entirely satisfied that (he) should grant permission”.

Implied permission

Counsel for the Defendants flagged the potential problem that if the review of documents was held to fall within the meaning of ‘use’, a scenario could exist where documents/statements could not even be read for the purpose of (i) assessing whether “the document has been read by the court, or referred to, at a hearing which has been held in public”, (ii) seeking permission of the court under the rule, or (iii) seeking agreement under the rule. Counsel argued that such an interpretation would lead to the parties being deprived of using the very mechanisms envisaged in CPR 31.22 and CPR 32.12.

In light of this issue, Mr Justice Knowles acknowledged that the Rules themselves must envisage the use of the document for this limited activity, but emphasised that the ambit of this implied permission is highly restricted.

Practical implications

The judgment entrenches the wide definition of "use" that was established in IG Index v Cloete, requiring a party that has possession of documents disclosed in other proceedings to ensure that it falls within one of the exceptions envisaged in 31.22 and/or 32.12. Ideally, a party would be able to obtain consent from the disclosing party/owner of the document/statement without the need to submit an application, but this judgment clearly opens up the possibility of a flood of permission applications to the courts. In anticipation of this risk, Mr Justice Knowles encourages parties to be “vigilant to the possibility of asking the Court to deal with applications “on the papers” and without a hearing in a straightforward case”.