Using Documents For A Collateral Purpose: Permitted Or Prohibited?

Over the past year, there has been a spate of cases concerned with the prohibition on the collateral use of documents in litigation. These decisions, a number of which have arisen out of the long-running Tchenguiz litigation, have helpfully clarified both what might constitute collateral use of a disclosed document and the circumstances in which a court will permit such use.

Why is collateral use of disclosed documents generally prohibited?

Under the Civil Procedure Rules (the Rules) a party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it was disclosed (CPR 31.22 (1)). The Rules effectively codify the common law position.

This prohibition is subject to exceptions where:

the document has been read to or by the court, or referred to, at a hearing held in public (CPR 31.22 (1)(a)); the court gives permission (CPR 31.22 (1)(b)); or the party who disclosed the document and the person to whom it belongs agree (CPR 31.22 (1)(c)). The protections imposed by CPR 31.22 recognise that the obligation to give disclosure is an invasion of a litigant's right to privacy and confidentiality. Such an intrusion is justified only because there is a public interest in ensuring that all relevant evidence is provided to the court in litigation. Therefore the use of those documents should be confined to that litigation. The prohibition also promotes compliance with the disclosure obligation1.

What constitutes collateral use?

This question was considered in one of the many decisions in the Tchenguiz litigation, which arose out of criminal investigations by the Serious Fraud Office (SFO) following the collapse of the Icelandic bank, Kaupthing, in 2008 (Tchenguiz & anr v Grant Thornton & others [2017] EWHC 310 (Comm)). After the SFO's investigation into the activities of the Tchenguiz brothers was discontinued, and no charges brought, they, in turn, brought proceedings against the SFO for malicious prosecution and misfeasance in public office. Those proceedings were settled and the Tchenguiz subsequently brought proceedings against Grant Thornton, Kaupthing's administrators, alleging a conspiracy that had provoked and prolonged the SFO investigation.

Reviewing a disclosed document to assess its relevance for disclosure in separate proceedings

In Tchenguiz v. Grant Thornton one or more of the defendants were in possession of documents disclosed in earlier Kaupthing-related litigation, which were potentially relevant in the proceedings brought against them by the Tchenguiz brothers. The court was therefore asked to consider whether it was a collateral use (1) for the defendants to review those documents to assess their relevance (and subsequent disclosure) in the instant proceedings and (2) for all parties to review such disclosure with a view to assessing whether they wished to rely on or use any document in the current proceedings.

The court held that these steps would constitute collateral use (but went on to grant permission for such collateral use). Knowles J suggested that the Rules allowed a wide meaning for the word "use", which accords with the meaning given it in IG Index v. Cloete2, where "use" extended to reading a document, copying it, showing it to someone and using the information contained in it.

Knowles J accepted that the Rules themselves envisaged some limited use of a document for the purpose of assessing whether it has been read to or by the court, or referred to, at a hearing held in public under CPR 31.22(1)(a); seeking permission under CPR 31.22(1)(b); and seeking agreement from the relevant parties under CPR 31.22(1)(c). However, such implied permission was limited and did not extend to reviewing documents to decide whether to rely on or otherwise make use of them in other proceedings.

In reaching his decision, the judge drew a distinction...