High Court Finds 'Control' For The Purposes Of Disclosure Includes Third Party Documents That The Litigating Party Can Access Under A Standing Consent Short Of An Enforceable Right

In a recent decision, the High Court found that the documents of two of the defendant's subsidiary companies were within its “control” for the purposes of disclosure: Pipia v BG Group Ltd [2020] EWHC 402 (Comm).

The decision shows that a party can have control over the documents of its direct or indirect subsidiaries (or some other third party) even if it does not have a presently enforceable legal right to obtain the documents. It is sufficient that there is an arrangement or understanding, whether or not legally enforceable as a contract, that in practice provides the parent with a right of access. This is consistent with previous cases that have taken a broad view of control for the purposes of disclosure (see for example this blog post).

The decision is of particular interest in finding that, to fall within this principle, there is no need for the litigating party to have wholesale access to the third party's documents; the arrangement or understanding may relate to a more restricted class of documents, in which case only those documents will be within the party's control. This is, however, distinct from a mere finding that the third party would probably provide documents if asked to do so. That does not, in itself, justify a finding of control.

Although the decision was reached under the rules for the disclosure pilot currently progressing in the Business and Property Courts, the decision is clear that the same principles apply in non-pilot cases.

The judgment contains a number of interesting comments as to the circumstances in which the court may draw adverse inferences, either regarding the existence of a control arrangement over documents or as to the underlying merits of the case. The decision suggests that:

In some circumstances, it may be appropriate to draw adverse inferences to the effect that a litigating party has control over a third party's documents due to its failure to makesensible requests for documents from that party. The reasoning is that the reluctance may stem from the knowledge that the third party would respond in a way that demonstrated the existence of an arrangement or understanding amounting to control. If a third party's documents are not within the control of a litigating party, there is no obligation on the litigating party to ask the third party to provide documents for disclosure, even if the third party would probably provide the documents. However, depending on all the circumstances of the case, a failure to request the documents may mean the court is justified in drawing an adverse inference going to the merits of the case, either generally or on some particular issue. Where the court finds that a control arrangement existed but has been terminated, and again depending on all the circumstances, the party which has terminated the arrangement may be at risk of an inference being drawn that the reason for termination was because the third party held documents that would be unhelpful to the party's position. Finally, the decision contains interesting commentary on one of the disclosure models under the pilot,Model C, which is defined asdisclosure of particular documents or narrow classes of documents relating to a particular Issue for Disclosure, by reference to requests set out in the parties' Disclosure Review Document or otherwise defined by the court. The judge...

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