Gaining control

It is not uncommon for litigators to be faced with a corporate opponent strenuously asserting that relevant documents held by related companies do not fall within the scope of its disclosure obligations. Naturally, that raises suspicion that the documents are unhelpful to the opponent's case. After all, barring oversight, incompetence or politics, helpful documents held by a related company have a habit of finding their way into evidence.

In some cases, concern arises that corporate group structures are being used, very unattractively, to manipulate the evidence put before the court.

The duty of disclosure extends only to documents that are, or have been, in a litigant's control. Control means physical possession, a right to possession, or a right to inspect or take copies. A litigant may correctly assert that none of these apply to documents held by a company in the same group. 'Right' means a legally enforceable right. The fact that a litigant may be able to obtain documents from a third party by consent is not sufficient to trigger an obligation to disclose those documents by the party to the litigation.

A litigant might seek to exploit these rules by asking group companies whether documents can initially be reviewed without copies being taken, or by asking that copies of only certain documents or categories of documents are provided.

The consequence could be that a litigant is putting material before the court only on the basis that it advances its case, and therefore without applying the requirement to disclose material that adversely affects its own case. The risk of incomplete or misleading disclosure is apparent. In some cases the fairness of the trial itself could be at stake.

An application for third-party disclosure may plug the gap, but is often not available. A litigant seeking to obtain documents from a third party cannot simply ask for a search to be undertaken for relevant documents, as if the third party was participating in the case and had a duty to do so. Instead, an applicant for documents from a third party must demonstrate that the documents sought are likely to support its case, or adversely affect the case of its opponent, and that disclosure is necessary to dispose fairly of the claim or save costs. It is often difficult to do that without good information about what documents exist.

Precision is also required in framing the disclosure request. Specific documents or narrow categories of documents must be specified. Fishing exercises won't work. These hurdles are designed to protect third parties from intrusive and time-consuming requests for disclosure in cases in which they have no interest. Equally, however, they can operate to assist a litigant to avoid giving disclosure of documents held by a related company.

Window of opportunity

It is often thought that the lack of an enforceable right to obtain documents is a complete bar to forcing disclosure. But that is not quite so, and a number of recent cases have opened cracks that an applicant may be able to exploit, particularly where there is some evidence of cooperation between group companies in relation to the dispute.

In Schlumberger Holdings Ltd v Electromagnetic Geoservices [2010] EWCA Civ 819, disclosure was ordered where the litigant had conducted a search of documents held by another company in its group, but had disclosed only some of them. The judge emphasised that the decision did not depend on the existence of a common corporate structure, but instead on the fact that a general consent had been given to search for documents for disclosure.

The issue was also considered by the Court of Appeal in North Shore Ventures Ltd v Anstead Holdings Inc [2012] EWCA Civ 11. The court stressed that regard must be had to the 'true nature of the relationship' between the litigant and the related third party. It was expressly recognised that it would be open to the court to decide as a matter of fact that the documents were within the control of a litigant, even where it did not have a legal right to possession.

These cases may help to found a successful attempt to force disclosure of helpful evidence from reluctant group companies, particularly of course where the opponent finds it difficult credibly to explain why documents are unavailable for disclosure given the relationship between companies or the manner in which some documents have been obtained.