Kay Stewart evaluates Castle Water Limited – and – Thames Water Utilities Limited [2020] EWHC 1374 (TCC)

The Business and Property Courts introduced a pilot scheme for disclosure at the start of January 2019, through the implementation of the scheme a pivotal question arose in relation to CPR PD51U regarding the continuing duty of disclosure over adverse documents. By way of background, Castle Water Limited (the Claimant) acquired a section of Thames Water Utilities Ltd (the Defendant) in late 2017. Following the acquisition, the Claimant becomes aware of numerous inconsistencies in clients’ personal data recorded by the Defendant. These irregularities made the basis of the Claimant’s claim against the Defendant who responded by countering the claim.

The progression of the case was halted by the disagreement of the parties as to the scope of CPR PD51U. The Practice Direction in question defines what constitutes an adverse document as “it or any information it contains contradicts or materially damages the disclosing party’s contention or version of events on an issue in dispute, or supports the contention or version of events of an opposing party on an issue in dispute”. Furthermore, the Practice Direction requires the party to have actually been aware of the adverse document being in existence.

The Honourable Mr Justice Stuart-Smith supported the Claimant by referring to the preceding judgments of UTB LLC v Sheffield United Limited [2019] EWHC 914 (Ch), McParland & Partners Limited v Whitehead 2020 EWHC 298 (Ch), and Brearley v Higgs & Sons [2020] EWHC 3776 (Ch) and highlighted that there is no presumption that a party is entitled to Extended Disclosure and the scope for disclosure is not wider than what is reasonable and proportionate to resolve the dispute at hand. Mr Justice Stuart-Smith further clarified reasonable and proportionate also refers to steps to locate the documents. Mr Justice Stuart-Smith also emphasised the requirement for parties to conduct further searches for disclosure documents if a material change arises in the opposing party’s case.

The consequence of the decision on those operating in the legal profession is the distinction between checks and searches. Under CPR 31 solicitors are held responsible for careful inspection and supervision of documentation throughout the disclosure process. In practice, this suggests the burden of searches illustrates itself as solicitors being wise to obtain all the documentation at the start of the case in order to avoid clients determining the relevance of which documents to provide. The more lenient route of checks being conducted would allow for more responsibility on the client to provide the documents with the solicitor playing a supervisory role.

For further information on this topic or on any other legal area, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors on 01372 303444 or email admin@audleychaucer.com or visit our Linkedin page.

Larissa Bourgi

This information was correct as of September 2021

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