High Court holds that Part 18 is not a fishing tool

• United Kingdom

• Commercial litigation

29-05-2018

(1) Barness and Others, and (2) Formation Group PLC and Others, with (3) Cole and Others and (4) Scion Ltd and Others [2018] EWHC 1228 Ch

In an interesting decision, the High Court recently held that a Claimants’ Part 18 Request, made at an early stage of the proceedings, was nothing more than a fishing expedition.  Having drafted, but not served, Particulars of Claim, the Claimants made the application under Part 18 of the Civil Procedure Rules (“Part 18”) for documents and/or further information in order to enable them to plead their case more fully and/or more effectively. Dismissing the application, the Court held that the material sought did not relate to any matter that was currently in dispute nor was the request reasonably necessary and proportionate to enable the Claimants to prepare their case. 

Background

The Claimants (Mr Cole and Others) requested further information and/or documentation under Part 18 (the “Application”).  The Claimants had not yet served their Particulars of Claim but had produced a lengthy draft version.  In the draft, the Claimants pleaded that two of the Defendants (Scion Financial Partners Ltd and Scion Ltd) had made fraudulent statements that had induced the Claimants to invest into three schemes and, in relying on those statements, the Claimants had suffered loss.  During the Application hearing, the Claimants confirmed to the Court that the draft Particulars of Claim could be served in their current form.  The Claimants’ barristers advised the Court that their signing the Particulars in their draft form once issued would not involve any contravention of their standards of professional conduct.  However, the Claimants sought in the Application a large number of documents or extensive information to allow them to plead their case more fully and/or more effectively.  A solicitor’s witness statement in support of the Claimants’ Application stated that the material was also necessary to ensure that all appropriate parties were joined to the claim.

Part 18 states:

“18.1. the court may at any time order a party to: (a) clarify any matter which is in dispute in the proceedings; or (b) give additional information in relation to any such matter, whether or not the matter is contained or referred to in a statement of case” (emphasis added).

The Practice Direction to Part 18 states:

“A Request should be concise and strictly confined to matters which are reasonably necessary and proportionate to enable the first party to prepare his own case or to understand the case he has to meet” (emphasis added).

Decision

Whilst the Court acknowledged that pleadings based on a fuller understanding of the facts are better pleadings for all concerned and such a position could avoid a reformulation of the claim at a later phase (e.g. after disclosure), it held that:

• an application made with the intention of identifying further defendants that could be joined to the claim or with the intention of obtaining information about further claims that might be made against existing defendants was not a request for information about a “matter which is in dispute” within Part 18.  That said, a Part 18 application justified on appropriate grounds will not be defeated if a consequence of success would be for the claimant to identify further causes of action or further defendants;
• it was possible that the Defendants would make an application to strike out part of the Claimants’ case as pleaded in the draft Particulars of Claim, but the Claimants had not demonstrated that the material sought was “reasonably necessary and proportionate” to enable them to prepare their case;
• the Court did not need to consider what the Claimants may need to present their case at trial or any intermediate stages before trial, nor what might possibly be in dispute in the future.   Part 18 deals with the current position at the time of the application and the matters currently in dispute; and
• the Claimants were seeking disclosure or information under Part 18 before their own pleading was served.  That this was unusual did not mean it could not be done, but the Court was not persuaded it should depart from the usual course (i.e. for the Claimants to plead their case based on the materials already available and to keep their position under review as the case advanced towards trial).

Impact

Parties should consider carefully whether a Part 18 request is the appropriate tool to deploy, particularly if they are at an early stage of proceedings.  Here, the Court did not rule out the possibility of making an order under Part 18 in the Claimants’ favour before Particulars of Claim were served; the Application was defeated primarily because the Claimants could, by their own account, prepare and serve Particulars of Claim without the information sought in the Application. 

The case suggests that the success of a Part 18 application at a very early stage of proceedings rests on a delicate balance between a claimant needing the information to prepare a sufficiently particularised claim and the defendant not being forced to help the claimant formulate the case against it. 

The Part 18 request in this case seemingly had an undertone of the Claimants attempting to identify additional defendants and additional causes of action, rather than to obtain further information on issues currently known and in dispute.  The outcome therefore reiterates that the courts will not tolerate perceived ‘fishing expeditions’ at any stage of a case.