March 19, 2009

PRE-ACTION DISCOVERY: Fishing on both sides of the Altantic

Filed under: 1 — ruleswatch @ 9:06 pm

A recent post on a UK [Wordpress] blog (“Data – where is it”)– apparently maintained by an alliance of UK electronic discovery, forensic and like technical experts, with some interesting material– has just visited “pre-action” (before a court proceeding has been begun) disclosure of documents.

Current UK civil procedure does provide a specific process for the disclosure of documents at the pre-proceeding stage, but the scope is limited. The governing English rules [Rule 31.16] provide for the possibility of court-ordered pre-action disclosure but only where there is likely to be an action and the disclosure sought would be effectively between parties to, and within the parameters fixed by the scope of, the likely action. The rule also explicitly preserves other common law (or presumably, equitable) rights of disclosure of documents [Rule 31.18].

But the extent to which the rule will be exercisable by any anxious applicant seems to be very tightly drawn. Black et al v. Sunimoto Corporation [2001] EWCA Civ 1819, a comparatively recent attempt to invoke the rule, sees sharp boundaries on how far the rule might go. The first instance court had allowed an order for disclosure of documents and Black seemed well on his way to constructing his claim. The court of appeal, however, seemed to feel that Black’s industrious case-building was simply going too far. Citing older and more conservative authority than one or two other cases that seem to be around, the court set out a principled basis for tight-fistedness in producing pre-action discovery of documents:

“It has to be remembered by all concerned that we do not have in this country an inquisitorial procedure for civil litigation. Our procedure is accusatorial. Those who make charges must state right at the beginning what they are and what facts they are based on. They must not use Anton Piller orders as a means of finding out what sort of charges they can make.”

Hytrac Conveyors Ltd v. Conveyors International Ltd [1982] 3 All ER 415 cited in the more recent Black et al v. Sunimoto Corporation [2001] EWCA Civ 1819

Nova Scotia’s old rules had made provision for court-ordered pre-action discovery (1972 Rule 18.02 provided:

Unless the court otherwise orders, an examination for discovery shall take place, …(c) where a proceeding has not been commenced, when the court orders.

but, to the extent there had ever been an attempt to access it, the judges who were approached on the point jealously guarded the door and instances of access granted, if any, were rare.

The new Rules appear to be much less generous in scope than the earlier rules in giving limited,specific direction as to where discovery can be ordered:

Rule 18.12 (2) provides:

A judge may order discovery before a proceeding has started in one of the following circumstances:

(a) the party who moves for the discovery wishes to start a proceeding but is prevented from doing so immediately, and evidence needs to be preserved;
(b) a proceeding is likely to be started against the party who moves for the discovery, and evidence needs to be preserved;
(c) a court outside Nova Scotia requests assistance.

So, on paper, it seems, the current Nova Scotia rules apparently restrict the broad scope of disclosure from what they used to be. In reality, however, by limiting the scope of the power to the preservation of evidence or to the request of an outside court, the practical effect will no doubt continue to be very much the same as it has been.

One last word on these insights from the UK: there is room to manoeuver. In another 2001 case, Bermuda International Securities Limited v. KPMG [2001] EWCA CIV 269, the Court of Appeal was more forthcoming than Black in a case of apprehended auditor’s negligence. (The theory of the applicant was that certain errors committed by Bermuda in remitting taxes ought to have been flagged when the firm’s accounts were being audited.) They ordered disclosure.

In doing so, however, the court made an extremely interesting observations as to costs. Although Bermuda’s efforts to obtain documents were successful, and even thought they overcame strong resistance by KPMG, the court made the following observation on costs following the application–

“In my view it is important that it is recognised that in relation to pre-action disclosure, the cost of the actual exercise will be paid by the applicant for that disclosure. But so far as the application is concerned if it has been unreasonably resisted, those are the very circumstances contemplated where the order for costs may be different.”

The lesson for us prctising in Nova Scotia courts under our rules, is that there is little scope for rule-based pre-proceeding disclosure, that the resistance to the idea is principle based and getting it, however stoutly resisted, will likely mean that the applicant will be left to bear his own costs.

Now in the meantime, there is the whole other ball game of equitable disclosure, pre-trial on which there is more to come.


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