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High Court orders disclosure of third party documents provided during negotiations for a Deferred Prosecution Agreement

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management - Disclosure Other

31-05-2019

Omers Administration Corp & Ors v Tesco Plc [2019] EWHC 109 (Ch)

Facts of the case

– During negotiations which ultimately culminated in a Deferred Prosecution Agreement (“DPA”), the Serious Fraud Office (“SFO”) provided Tesco Plc with a number of documents obtained from third party individuals during its criminal investigation pursuant to its powers under section 2 of the Criminal Justice Act 1987. The SFO provided the documents (which included transcripts of interviews and witness statements) under strict confidentiality obligations.

– Two groups of shareholders, including Omers Administration Corp (“O”), later brought civil proceedings against Tesco. The documents in Tesco’s possession fell subject to the test for standard disclosure pursuant to Part 31 of the Civil Procedure Rules.

– Although it did not object to disclosure in principle (and O was willing to agree to restrictions on its use of the documents), Tesco found itself caught in a conflict between the requirements of Part 31 and the terms of confidentiality agreed with the SFO.

– The High Court was asked to rule accordingly, and asked for submissions from all parties, including the individuals whose documents were under discussion.

The decision

– Hildyard J considered the wider public interest in maintaining confidentiality, including the respect for private life of the persons who were the subject of the information, and the encouragement restrictions on disclosure are likely to give to the timely disclosure of information which may be of importance to investigatory and regulatory bodies.

– Ultimately, however, Hildyard J found that, while the weight to be given to the various competing factors was a matter for the Court’s discretion, the key question to be considered was whether the overriding objective of dealing with a case justly and at proportionate cost could be secured without production of the relevant documents.

– Accordingly, Hildyard J held that the documents in question should be disclosed by Tesco as:

(1) they were likely to contain material “necessary for the fair disposal of the action”; and

(2) the public interest in confidentiality (though of particular weight when documents were originally obtained by compulsion under the SFO’s powers) had to yield to the public interest in ensuring “the courts try civil claims on the basis of all relevant material”.

– The latter was notwithstanding that many of the third parties (who were private individuals) did not foresee (nor could they have done) that their documents would end up forming part of civil proceedings such as these.

Analysis and practical advice

– In the case of an application by a party for production of documents from another party which accepts the documents are relevant, the balance is very likely to favour disclosure (even where production was initially compelled), unless the same information is available from another source without disproportionate difficulty. However, it is clear from this case that the Court should nevertheless:

(1) approach the matter by reference to all the circumstances, and without any presumption one way or the other; and

(2) seek to impose protections insofar as they are compatible with the needs of justice, which will include the public interest in a transparent and open process, and the interests of litigants in having their disputes conducted on the basis of all relevant materials.

– Accordingly, it is probably only in circumstances where the Court is both persuaded of strong considerations against disclosure (such as that the documents were compelled), and unpersuaded of there being a litigious advantage to be gained by disclosure which could not be obtained in some other less intrusive way that it will refuse production. Furthermore, in circumstances where the Court is initially unpersuaded, Hildyard J suggested that it should ordinarily inspect the underlying material to satisfy itself further.

– The case therefore underscores the importance of parties ensuring that any production orders to which they are subject are appropriate in scope, and that care is taken regarding what documents they allow to come into their possession or control, as in both cases these may ultimately end up disclosable in subsequent civil proceedings.