High Court Underlines Need To Consider Scope Of Agency In Considering Whether Documents To Which Agent Has Access Are In Principal's Control

• Published date: 04 April 2023
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Herbert Smith Freehills
• Author: Ms Anna Pertoldi, Ajay Malhotra and Maura McIntosh

In a recent decision, the High Court has held that the documents of a claimant's creditor were not in the claimant's control for the purposes of disclosure. Although two employees of the creditor acted as the claimant's agent in conducting the litigation, that did not mean that all the documents to which they had access in their capacity as the creditor's employees were in the claimant's control: Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd [2023] EWHC 548 (Comm).

This adds to a line of judgments in recent years considering the question of when a third party's documents are in a litigant's control and therefore subject to its disclosure obligations. The courts have taken a relatively broad view, finding that there is no need for an enforceable legal right to obtain the documents; it is sufficient that there is a continuing arrangement or understanding that in practice provides the litigant with a right of access.

However, there are limits. The present decision shows the court's approach where it is argued that a principal has control over documents on the basis that its agent can access those documents. The question comes down to the scope of the agency. While a litigating party will have control over the documents of its agents, acting in that capacity, it will not have control over documents which the agents can access in a separate capacity (here, as employees of a creditor).

In some cases, the more appropriate route for parties seeking documents held by a third party may be an application for non-party disclosure under CPR 31.17. That allows the court to order disclosure of documents that are likely to support or adversely affect the case of any party, if such disclosure is necessary to dispose fairly of the claim or to save costs. However, such orders are generally seen as "exceptional, or at least not normal", as the court commented in the present case.

Background

The claimant brought claims against the defendants in relation to certain CDO transactions the defendants had arranged. The defendants deny the claims and also raise a limitation defence.

An issue relating to limitation is when the claimant could, with reasonable diligence, have discovered the alleged misconduct which forms the basis of its claims. Because the claimant is a special purpose vehicle, there are issues as to whose knowledge is to be attributed to it. The defendants' case is that the knowledge of (inter alia) a German bank, "KfW", which was the...