Cornerstone – The importance of understanding disclosure obligations

Disclosure can be a complex and costly stage of any dispute, irrespective of the value and complexity of any particular dispute. Differing disclosure obligations arise at different points of claims, and can also exist in contract depending on specific terms.

We recently defended an application for disclosure of hundreds of thousands of documents from our client in the case of Equipe Regeneration Limited v. Higgins Construction Limited & Others [2020] EWHC 3293 (TCC). Unusually the application was made following issue but before service of particulars – with the claimant saying that the documents were required so that it could make its case. Disclosure is a valuable and important part of litigation. However we argued that the disclosure process does not serve as an obligation to make the other party’s case – and the application for disclosure was refused.

An overview

Equipe Regeneration Limited (Equipe) issued protective proceedings against Higgins Construction Limited (Higgins) on 29 November 2019. The claim was eventually served on Higgins on 29 March 2020 but no particulars of claim were severed, in time, or at all. Equipe had also failed to serve a pre-action letter in any form.

Upon service of the claim form, Equipe requested a six-month extension of time in which to serve the particulars of claim which it said was necessary to “complete its investigations”. An extension of time was agreed to 18 September 2020.

Around August 2020, Equipe began requesting documents from Higgins, which it said Higgins was obliged to provide under the terms of the contract and were required “for the proper performance of its [contractual] obligations”. It also asked for a further six months to file and serve its particulars of claim. The documentation requested spanned several hundreds of thousands of documents – the dispute concerned maintenance works carried out across around 2,000 properties over a lengthy period.

Higgins resisted the requests in light of the fact that not only had Equipe had access to the documents, in one form or another, for around 12 years prior, it had also failed to serve a pre-action letter, the particulars of claim or set out why such documentation was relevant. That was despite numerous requests to do so. In reality, the documentation request was in fact a request for all the project documentation principally aimed at assisting Equipe in making its case against Higgins.

On this basis, Higgins refused to disclose the documentation and Equipe proceeded to make an application premised on its belief that Higgins was contractually obliged to disclose the documentation. It also formally applied for the extension for service of the particulars.

The application

Equipe conceded shortly before the hearing that it was already in possession of some 864,000 documents that formed part of this request, so it therefore abandoned 95% of its disclosure request.

The remaining requests were dealt with by the court. The judge noted that the time for pre-action disclosure had long passed – the claim was issued almost 12 months ago. He also noted that the usual time for disclosure is yet to have arrived – as the pleading phase of litigation must be sufficiently complete. It was also confirmed that the disclosure obligation under the court’s Disclosure Pilot Scheme only arises once the defendant in the proceedings (Higgins, in this case) can understand the claim against it, and that requires service of the particulars of claim. As noted above, Equipe had failed to take this step, or any pre-action steps whatsoever.

So far as Equipe’s claim that the contract allowed it a route to disclosure, the court said that the contractual provisions were clear. It concluded that unless the disclosure has some form of operational requirement, there was no contractual obligation to disclose anything, particularly as a part of litigation.

Analysis

Disclosure is a valuable and important part of litigation. However the disclosure process does not serve as an obligation to make the other party’s case. There is no particular obligation to assist the claimant in making its case, particularly in circumstances where it cannot set this out on its own accord.

While this was only an interim application that forms part of a wider, more complete dispute involving substantial PFI refurbishment and maintenance contracts, its importance to claimants and defendants alike remains stark. Applications of this nature are becoming more common as leverage against the other party. Knowing how disclosure obligations operate will ensure you are not subject to vast, meritless disclosure requests – let us know if we can help you.

This article is from the December 2020 issue of Cornerstone, our newsletter for those working within the construction industry. For further information please contact a member of Birketts’ Construction Team. To download the latest issue, please visit the newsletter section of our website.