Confidence in disclosure

Stuart Barrie Wall v The Royal Bank of Scotland plc [2016] EWHC 2460 was initially regarded by some, including the judge, Mr Andrew Baker QC, as ‘something of a test case for whether third-party funders can remain anonymous’.

RBS believed that Mr Wall should identify his third-party funders – an application that was granted – to ensure the bank would be able to seek costs should it successfully defend the litigation.

A recent leak of documents relating to the case to BBC Newsnight and Buzzfeed, however, has shifted the focus onto that of disclosure, with RBS and its solicitors, Dentons, being accused of a ‘serious and substantial breach of [their] disclosure duties’.

Wall is reportedly suing the bank for £400m. The case revolves around RBS’s Global Restructuring Group, the bank’s controversial ‘troubled business unit’. A report by government adviser Lawrence Tomlinson in 2013 was highly critical of the GRG, alleging that the unit had deliberately driven companies to the wall and then moved in to purchase their assets at heavily discounted prices. RBS has consistently denied these allegations, and paid Clifford Chance to undertake an ‘independent investigation’ which found there was ‘no evidence’ to back these claims.

The leaked documents, however, not only appear to confirm the report’s accusations, but they also mean RBS and its solicitors may be guilty of a serious and substantial breach of their disclosure duties. The failure to disclose details impacted on the focus of the case and, according to Wall, this omission was made deliberately.

The deliberate act of failing to disclose important information can lead to the evidence being re-reviewed by the court. Although any party can make an application to have the evidence looked at again if they feel non-privileged information is being withheld, case law demonstrates that such an application will fail if the court feels that the failure to disclose is minor, relates to a small amount of material, and was the result of an honest mistake. Such was the decision in Vilca and 21 others v Xstrata Limited and another [2016] EWHC 1824, even though the initial failure to disclose had concerned significant information.

Nolan Family Partnership v Walsh [2011] EWHC 535, on the other hand, resulted in the order being made, the test of ‘strong grounds’ having been met.

Whether a re-review is ordered in Wall’s case remains to be seen. However, the nature of the material leaked, being fundamental to the operations of GRG, suggests to an extent that the failure to disclose was of a serious nature.

Regardless of the final decision, the case underlines the importance of handing over all relevant material during the process of standard disclosure to avoid both the cost and time implications of a re-review, as well as the reputational damage of being seen to deliberately withhold information.

Coupled with the previous decision on the identity of Wall’s third-party funders, this latest development provides an ongoing example of the possible consequences when individuals face larger corporations.

Daniel Hayward-Hughes is an associate at Signature Litigation

@SignatureLitLLP www.signaturelitigation.com