Pre-action disclosure – a reminder of the test and rule on costs

BDB Pitmans has successfully opposed an application for pre-action disclosure of documents in the case of Tudor Smith Investments Limited v Joseph Puthencherbyil Medayil [2020] EWHC 3263 (Ch) highlighting the test for pre-action disclosure and cost consequences of such an application.

Phil Smith, Partner and Sophie Austin, Associate in BDB Pitmans’ commercial litigation team acted for the Respondent, Mr Medayil. The Applicant had issued an application for pre-action disclosure without first requesting the documents or warning. In addition, the Applicant had asserted that the information was required in contemplation of legal proceedings but failed to sufficiently explain what proceedings were contemplated or what cause of action it might have. Whilst the Respondent provided the documents he found in relation to the request, application was successfully opposed and costs awarded in his favour.

General rules and principles

The court’s general rules regarding pre-action disclosure are set out at CPR 31.16. An application for pre-action disclosure must be supported by evidence and the Court may only make an order under this rule where the following jurisdictional tests are met:

1. the Applicant and the Respondent are likely to be parties to subsequent proceedings;
2. if proceedings were issued, the Respondent’s duty by way of standard disclosure would extend to the documents sought; and
3. pre-action disclosure is desirable in order to dispose fairly of the anticipated proceedings, to assist the dispute to be resolved without proceedings, or in order to save costs.

An application must be supported by evidence demonstrating the jurisdictional tests have been met, though even where the jurisdictional tests are met, it is still within the Court’s discretion to decide whether or not to make an order.

The general rule on costs is that the Court will award the person against whom the order is sought, the costs in complying with an order for pre-action disclosure. The Court can exercise its discretion and made a different order, taking into consideration all the circumstances of the case, including the extent to which it was reasonable for the Respondent to oppose the application and whether the parties have complied with relevant pre-action protocol.

Judgment

ICC Judge Barber’s decision was succinctly set out, as follows:

‘It is clear from the evidence filed…and from the lack of any pre-action protocol correspondence, that at the time that the application was issued, the Applicant did not trouble itself to identify or expressly to rely upon any particular claim; it simply wanted delivery up of the documents. This was a mis-use of the pre-action disclosure regime. In my judgment the Respondent acted entirely reasonably in opposing the application’.

Due to the lack of evidence filed by the Applicant in support of its application, it was held that the jurisdictional tests were not met and that the Respondent was entirely reasonable in opposing such an application. The Applicant was ordered to pay the Respondent’s costs, including the reasonable costs of locating and delivering up the documents.

How we can help

In summary, this case serves as a reminder that an application for pre-action disclosure must be made with caution through proper application of legal principles and strong supporting evidence. The person against whom an order is sought will generally be awarded its costs of complying with an order for pre-action disclosure.

If you are faced with an application of this nature, or are considering if you are able to obtain documents through an application for pre-action disclosure please do contact Phil Smith or Sophie Austin.