Globe trotter

This series concentrates on civil procedure in this jurisdiction but we should not dismiss the possibility that procedure in other jurisdictions may be used in aid of a claim.

For many claimants, contingency fees, lack of adverse costs orders and substantial damages make the US, at least on paper, attractive. Over the past ten years there has been a growth in European claimants joining US class actions, particularly in relation to securities fraud. The recent US Supreme Court decision in Morrison v National Bank of Australia, however, closed the door to many such actions. Morrison represents the direct route into the US as a plaintiff, but it is not the only route to call upon the US jurisdiction and its apparent attractions.

If a party to proceedings (including arbitration) here seeks evidence in the US they can seek the assistance of the US court, particularly in relation to discovery and oral testimony; a much wider discovery process than would be available in this jurisdiction and certainly much wider than in civil law jurisdictions.

In particular section 1782 USCA 28 provides that the US court may order a person to give testimony or statement or to produce a document for use in a proceeding in a foreign or international tribunal. The order may be made upon the application of any interested person. In the absence of other direction, the testimony is taken, and the documents produced, in accordance with US standards.

Even divided by common language this section requires little translation. The target has to be within the jurisdiction of the district court to which application is made. Proceedings here do not have to have been commenced, they can be prospective. The relief granted is, however, discretionary and naturally this will change from court to court and judge to judge. It is essential in making the application to have on board a local practitioner who understands and knows the court and judges well.

The procedure is relatively straightforward and is based on a 'show cause' process. Application, with evidence, is made to the court without notice although the court can require a hearing on notice. When the order is served, the respondent has to return to the court to show cause why the order should not be made. They can do this either in writing or the court may fix an oral hearing. The court can make an order in relation to documents and/or depositions.

Powerful tool

One of the factors that may be taken into account by the court is the state of the proceedings and the attitude of the court in the other jurisdiction. This is where the relationship between the application and the claim being made here is vital. No doubt the push into the US is not going to be a popular move with respondents or the other party. Opening up on a new front is of course perhaps satellite litigation but it is a satellite with some projectile force. The attitude of the US court may also be determined by the identity of the respondent. If they are a party to the English action the district court may refuse the application. Even if refused, however, the usual US rule applies that there is no order for costs.

This may be seen as an unusual move in litigation, but it is not so unusual as to not have been considered by the English court.

In particular, in South Carolina Insurance v Assurantie Maatshappij [1987] AC 24, the relationship between an application under section 1782 and English proceedings was considered.

The court concluded that a party was fully entitled to go to other jurisdictions and seek out documents and evidence that may be held there. The attitude of the court may, however, be dependent on the stage of the proceedings that has been reached. Any respondent may say that before disclosure any application under 1782 is premature. While the domestic court may have no control over what happens in the US court, it has some control over the parties and might determine that the applicant should postpone any application in the US until after disclosure and witness statements. This will be in the discretion of the court and will depend on the attitude of the judge.

Subject to these issues, any order that is made in the US is based upon the US standards of discovery for both documents and depositions. It can therefore be an extremely powerful tool in the litigation process.

Alternative methods

This, however, is not the complete picture. Section 1782 can be used in arbitration proceedings, but for those involved in arbitration there are other methods. For example, the State of New York has specific provisions for assistance to be given by the US courts to arbitration processes in other jurisdictions. Section 7502(c) of the New York Civil Practice Law and Rules allows New York courts to grant remedies including injunctions in aid of arbitration in another jurisdiction. Like section 1782, the arbitration can be prospective.

Similarly, post-award, New York has extremely wide powers of enforcement, both domestically and internationally, but, more importantly, for the enforcement of arbitration awards. These include attaching to accounts in any bank in the world which has a branch within New York.

As business becomes globalised, the opportunities in other jurisdictions increase. Not only are we importing litigation but we are also exporting it to other jurisdictions. Practitioners need to think broadly about enforcement and process in other jurisdictions as part of the home litigation process. The examples here are from the US, but other jurisdictions have similar advantages. The majority of us may think domestically, but there is a world of advantage waiting outside our own jurisdiction.