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Published 1 mayo 2019
A slew of recent cases has illustrated the English court’s approach to evidence sought in the context of multi-jurisdictional proceedings and investigations – and especially at the intersection of the civil and criminal law. See, for instance, our articles on cases where:
These cases are accompanied by a recent interlocutory decision in ACL Netherlands BV (As Successor to Autonomy Corp Ltd) v Lynch concerning the circumstances in which the English court will allow a party to disclose confidential information disclosed in litigation (documents and witness statements) for a collateral purpose – in this case, to assist an FBI investigation in the US.
Autonomy v Lynch
This case forms part of much larger fraud proceedings relating to the sale of Autonomy to Hewlett Packard, itself the highest-value fraud claim ever brought against an individual before the English court. Simultaneously, criminal proceedings and investigations are underway in the US. (Indeed, the Second Defendant to the fraud claim has already been convicted.) As part of this wider context, the FBI is investigating the same alleged fraud which forms the basis of the wider English proceedings. The Claimants argued they were subject to a subpoena issued by a Grand Jury of the US District Court for the Northern District of California. The subpoena required the Claimants to deliver up all relevant documents to the FBI, including those in the English litigation. It was common ground that the Civil Procedure Rules (CPRs) require a party to obtain the English court’s permission before using documents disclosed in the litigation, or witness statements, for any purpose other than that litigation (a ‘collateral purpose’).The subpoena cast its net wide, requiring production of “All documents produced by any party in…[the claim]” and “All witness statements produced by any party in such case.” The English court is generally wary of a ‘fishing expedition’ such as this (described by the judge as a ‘trawl’ at one point in his decision), and has a duty – enshrined in the CPRs – to protect confidential material in litigation unless and until it is put into evidence in open court, or some other pressing reason overrides this. Conversely the English court is bound by comity to give due care and attention to the needs of a foreign court, and a serious fraud investigation is clearly a matter of considerable public interest. Moreover, the Claimants argued that they would be ‘between a rock and a hard place’ if the English court.
CPR 31.22 and 32.12 contain the relevant restrictions, and required the Claimants to seek the English court’s permission to use disclosed documents and witness statements for a collateral purpose. The Court’s starting point is that disclosure obligations in legal proceedings are necessarily an invasion of litigants’ privacy and confidentiality, which the Court overrides for the purpose of effective litigation – and for this purpose only. The Claimants therefore needed to prove that the collateral use to which they intended to put the documents was a legitimate exception to this general rule.
The Court therefore starts from the proposition that there is a significant public interest in not permitting collateral use of disclosed documents / witness statements. However, the Court may be willing to override the general rule if there is a pressing public interest which trumps the public interest in keeping such material confidential. The public interest in the investigation of serious fraud is one such interest. The court therefore weighs up the justification for collateral disclosure on the one hand, and potential prejudice on the other. These considerations are cumulative, and neither trumps the other. This will always be a discretionary balancing exercise for the English court, and nothing can mechanistically ‘trump’ the Court’s duty to exercise this discretion, no factor will automatically oblige the English court to grant permission for collateral disclosure.
In this case, the judge came down firmly on the side of protecting the documents / witness statements from disclosure.
It is interesting to read this decision in light of the English court’s jurisdiction to give effect to a simple ‘Letter of Request’ under the Hague Convention, which seeks evidence in support of civil proceedings in a foreign jurisdiction. In Letter of Request cases, the English court typically refrains from looking behind the foreign court’s assessment of the evidence it needs for trial – the foreign court should, after all, know its own case better than the English judge. However, the English court usually also looks out for some indication that the US court has actually turned its mind to whether the evidence sought really is needed for trial (an element of the test for giving effect to such a Letter). There was no such indication in this case, and – given the breadth of the requests – the judge was more than usually blunt in his conclusions that the evidence sought was not necessary. Of course, the facts in this case were unusually clear. Why should the English court override its own rules to assist a US authority in obtaining an indictment when that indictment has in fact already been obtained?
Above all, this case emphatically demonstrates that the English court has – and will use – discretion when deciding whether to permit collateral disclosure, and will exercise that discretion according to all the circumstances. This is not a mechanistic exercise, and there is no ‘trump card’ that will always win out, even compulsion in another jurisdiction. This can put litigants into an invidious position vis-à-vis their own regulator. But then, siding mechanistically in favour of collateral disclosure in all circumstances could similarly prejudice other litigants. Fundamentally, this is a ‘balance of harms’ exercise.
Of course, the complications don’t cease with the court’s decision not to permit collateral disclosure. The judge took pains to emphasise the distinction between a witness statement before and after it has been put into evidence in open court. The Claimants will, we presume, still need to disclose material from the English proceedings to the FBI on a rolling basis, as and when it becomes a matter of public record by reason of its use in the trial.
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