Use of disclosed documents to threaten new proceedings was a breach of court rules and may amount to a contempt of court by the solicitor and client
12 December 2017
The Civil Procedure Rules (CPR) provide that using documents disclosed in existing proceedings (except for the specific purposes allowed) breach the rules. CPR 31.22 provides various exceptions to when a document disclosed in a set of proceedings may be used. Any use outside of the rules could also amount to a contempt of court. Both the client who relied on the solicitor’s advice and the solicitor may be equally vulnerable to the contempt proceedings where there is no evidence of deliberate or reckless misconduct by the solicitor.
In Grosvenor Chemicals Ltd and others v UPL Europe Ltd UPL produced crop protection products and sold pesticides. UPL commenced claims for passing off against various parties including Grosvenor Chemicals. Grosvenor Chemicals and UPL entered into a consent order agreeing terms about specific disclosure. Key documents then emerged from the disclosure which included emails between individuals working at Grosvenor Chemicals and an ex-employee of UPL which discussed the formulation of the product in issue and indicated the product complained of was formulated in order to match UPL’s product. The solicitors acting for UPL wrote to the ex-employee explaining the breach of confidence and what steps he must take to avoid legal proceedings being issued against him. UPL’s solicitors also wrote a letter to Grosvenor Chemicals’ solicitors stating that the documents produced on disclosure indicated that there were possible further claims or ways of reforming existing claims which may be brought against the applicants and may also involve a third party not currently included in the action. The Grosvenor Chemicals applied under CPR 81.14(1) for permission to bring proceedings for committal for interference with the administration of justice for breaching CPR 31.22.
Birss J held that the correct approach to CPR 31.22 was that if a party reviewing documents disclosed in a given set of proceedings identifies that there was a properly arguable basis for joining a third party into those proceedings as a co-defendant with the existing defendants, in relation to the existing causes of action pleaded in the proceedings, then that party has done nothing other than use the documents for the purposes of the proceedings in which they were disclosed.
In this case, the UPL’s solicitors had threatened new proceedings against the former employee and, therefore, breached CPR 31.22. However, Birss J found there was no strong prima facie case of deliberate or reckless breach of the rules. Birss J stated that if there had been clear evidence of a deliberate attempt to flout the rules then it may have been in the public interest to bring contempt proceedings, however, the current case ‘did not come close’ on the facts. UPL’s solicitors also stated that UPL was acting solely on their advice and had no independent knowledge of the relevant rules. However, as there was no evidence of deliberate or reckless misconduct by the solicitors, Birss J was unable to distinguish between the solicitor and client. Therefore, if the application was granted, it would have been against the solicitors and their client.
In dismissing the application, Birss J also attached weight to the fact that as soon as the problem was raised, the UPL’s solicitors promised not to repeat the use and demonstrated why they thought the issues were not collateral. They also apologised unreservedly if they were wrong in their understanding.
- This case serves as an important reminder about the restrictions which apply to CPR 31.22. If a party receiving disclosure wants to use a disclosed document for a purpose other than the current proceedings, they must fall within the exceptions which are that they seek permission from the court or disclosing party and the person to whom the document belonged or the document has been read or referred to in court.
- It is also worth noting that solicitors will not fall foul of CPR 31.22 if they review disclosed documents in the course of proceedings and in doing so it comes to light that proceedings would be possible. This would not amount to use for a collateral purpose. In this case, the letter to Grosvenor Chemicals solicitors did not amount to use outside the rules because the party receiving disclosure is entitled to use documents produced on disclosure in the proceedings to raise new causes of action which relate to the same proceedings without being in breach of CPR 31.22. However, if the disclosed documents were reviewed in order to advise on whether other proceedings would be possible that would amount to use for a collateral purpose and be a breach of the rules.
- Even though UPL’s solicitors stated that they were advising UPL and they had no independent knowledge of the court rules the fact the documents were disclosed to them would mean they were equally vulnerable to a claim of contempt.