Court of Appeal clarifies when court will allow inspection of documents mentioned in witness statement or statement of case

In a recent decision, the Court of Appeal has clarified the approach to be taken in determining whether the court should allow inspection of a document "mentioned" in a witness statement or statement of case: Blue Holdings (1) PTE Ltd & another v National Crime Agency [2016] EWCA Civ 760. 

The decision confirms that there is no unqualified right to inspect such a document; inspection may be resisted for example on grounds of proportionality or legal professional privilege, though the burden is on the party resisting inspection to displace the general rule that a "mentioned" document may be inspected. Confidentiality is also a relevant factor, though it will not be determinative.

In exercising its discretion, the court will need to find a just balance between the competing interests of the party seeking to inspect and the party seeking to maintain confidentiality. In striking that balance, the court may properly have regard to the question of whether inspection is necessary for the fair disposal of the action, but there is no standalone "necessity" test which needs to be satisfied before allowing inspection.

The practical message for parties who wish to maintain confidentiality in particular documents is, so far as possible, to avoid mentioning them in witness statements or statements of case. If confidential documents are mentioned, it will be for the court to balance the competing interests, and it may be difficult to predict where that balance will be struck.

Elizabeth Allsop, a senior associate in our disputes team, considers the decision further below.

Background

Under CPR 31.14(1), a party may inspect a document "mentioned" in a statement of case, witness statement, witness summary or affidavit.

In the present case, the National Crime Agency (NCA) applied on behalf of the US Department of Justice (DOJ) to preserve assets valued at over £100 million which the DOJ claimed had been derived from large-scale corruption and embezzlement carried out during General Abacha's regime in Nigeria. The application was made pursuant to Article 141A of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005, which permits a UK enforcement authority to obtain a prohibition order from the court in relation to property in England and Wales pursuant to an external request from an overseas authority. The prohibition order sought was for preservation of the assets pending the conclusion of forfeiture proceedings in the United States.

The Respondent, General Abacha, applied under CPR 31.14 to inspect the DOJ's request to the NCA for Mutual Legal Assistance (the "Request"), on the basis that the Request was referred to in a witness statement served in support of the application for the prohibition order.

At first instance, the court dismissed General Abacha's application to inspect the Request on the basis that it was a confidential state to state communication and disclosure was not necessary for the fair disposal of the NCA's application. General Abacha appealed.

Court of Appeal decision

The Court of Appeal allowed the appeal in part.

Was the document "mentioned"?

The NCA, on behalf of the DOJ, tried to resist inspection on the basis that the Request was not mentioned in the witness statement and therefore CPR 31.14 did not apply. It argued amongst other things that the witness statement merely "described a transaction from which the existence of a document or a category of documents could be inferred".

The Court rejected these arguments. The test for whether a document is mentioned for the purposes of CPR 31.14 is the test of "direct allusion" or "specific mention". It is a general test which is not intended to be difficult.

Here, the language of the witness statement made a number of direct allusions to the Request, including: "The relevant property which is identified in the external request from the DOJ…" It was, the court said, difficult to see how else this passage could be read. The Request was plainly mentioned in the witness statement.

The correct analysis

At first instance, the issue of whether inspection of a document mentioned in a witness statement should be granted was dealt with as a question of whether inspection was "necessary for the fair disposal of the application".

The Court of Appeal disagreed with this analysis; the question of necessity was relevant but arose for consideration through a different route. The correct analysis, the Court of Appeal said, was as follows: 

• The fact that a document is "mentioned" in one of the documents listed in CPR 31.14(1) does not automatically entitle the applying party to inspect it. The court retains a discretion to refuse inspection.
• The general rule is that a document mentioned in a witness statement can be inspected. The party who refers to the document does so by choice, usually because it is essential to the cause of action or is of significant probative value. CPR 31.14 reflects basic fairness to put the parties on an equal footing.
• The right is not unqualified however. Inspection may be resisted for example on grounds of proportionality or privilege. The party opposing inspection bears the burden of justifying displacing the general rule that a document mentioned in a witness statement can be inspected. In determining issues of proportionality, the court will likely have regard to whether inspection is necessary for the fair disposal of the application.
• While disclosure and inspection cannot be refused simply because documents are confidential, confidentiality is a relevant factor in determining whether to order inspection. The court must strike a just balance between the competing interests of the party seeking inspection and the party claiming confidentiality. In striking that balance, the court may (again) properly have regard to the question of whether inspection is necessary for the fair disposal of the application
• There is however no standalone "necessity" test which needs to be satisfied before allowing inspection where CPR 31.14 is otherwise satisfied.

Decision on the facts

In this case, the DOJ maintained that inspection should be refused because of the confidentiality of the Request (even though it conceded that some of the key information in the Request was no longer confidential). The DOJ's position was that the Request was of a category of document that was confidential, and that this should be preserved.

The Court of Appeal was not persuaded. It held that a careful balance needed to be struck between the "strong and legitimate interest" in the confidentiality of the Request and the "obvious and fundamental importance" of dealing justly with the case before the court. It was a striking feature of the present case that assistance was sought pursuant to a legislative scheme requiring the court to be satisfied of the jurisdictional basis for a prohibition order. In requesting the court's assistance in this matter the DOJ (even notwithstanding its status as a foreign central authority) could be taken to have accepted the procedures of the Court, which include disclosure and inspection of documents "mentioned" under CPR 31.14.

In this case, the Court of Appeal struck a balance by ordering inspection but permitting redaction of parts of the Request to preserve confidentiality in those parts where it considered that confidentiality outweighed the interest in inspection.