High Court orders broad "train of inquiry" (or Model E) disclosure on key issue in dispute

In a recent decision, the High Court has made a rare order for disclosure to be given under Model E of the Disclosure Pilot at PD51U - ie old-fashioned "train of inquiry" disclosure, of the sort that applied before 1999 when the Civil Procedure Rules introduced a more limited concept of "standard disclosure": Ras Al Khaimah Investment Authority v Azima [2022] EWHC 1295 (Ch).

The debate in this case was between Model D and Model E disclosure. Model D essentially replicates standard disclosure, ie those documents which are likely to support or adversely affect any party's case. The difference between the two models is that Model E also includes "train of inquiry" documents, or those which "may lead to a train of inquiry which may then result in the identification of other documents for disclosure" (because those other documents are likely to support or adversely affect any party's case).

Even before the introduction of the Disclosure Pilot in 2019, with its focus on restricting disclosure to what is really needed to determine the issues in dispute between the parties, orders for train of inquiry disclosure were already rare. This is illustrated for example by Berezovsky v Abramovich [2010] EWHC 2010 (considered here) in which such an order was refused despite the case involving huge sums and involving allegations of fraud.

It is important to note that, although train of inquiry disclosure was ordered in the present case, it was ordered only in relation to a particular issue, which the court described as a "core critical issue" in the case. It was also significant that there were allegations of a cover-up, and that there had clearly been a substantial loss of documentation, whether or not that was the result of a deliberate policy by the respondent (which the judge could not assess in the context of the application). The decision does not indicate that a more expansive approach will be taken to ordering train of inquiry disclosure, but is of interest in illustrating the circumstances in which such an order may be considered appropriate.

The decision also considers an application for security for costs, which is addressed in our separate blog post here.

Background

As explained in our separate post on this case, applications relating to disclosure and security for costs arose in the context of a retrial of the defendant's (Mr Azima's) counterclaim against the original claimant, the Ras Al Khaimah Investment Authority (RAKIA), relating to allegations that Mr Azima's email accounts had been unlawfully hacked by RAKIA and four other defendants (who were added to the counterclaim with the court's permission).

The court had to determine various issues relating to disclosure, including the wording and/or inclusion of certain issues for disclosure and the appropriate disclosure model for some of the issues.

This blog post focuses on the wording of one of the issues for disclosure ("Issue 3(a)"), as set out below, and the appropriate disclosure model in respect of it:

"From 1 December 2014 until 30 September 2016 what steps, which were or might reasonably be construed as being unlawful, were taken by or on behalf of [the defendants] to obtain information about or belonging to Mr Azima. What information was thereby obtained, to whom was it provided, and for what purpose was it provided?"

Mr Azima argued that the underlined words, which were proposed by the defendants, should be excluded from  Issue 3(a), and that disclosure should be ordered in respect of that issue under Model E. The defendants argued that disclosure should be ordered under Model D.

Decision

The High Court (Michael Green J) held that the broader wording should be adopted for Issue 3(a) (ie excluding the words underlined above) and that disclosure should be ordered under Model E.

Broader or narrower wording 

The judge noted that paragraph 7.3 of PD51U provides that "Issues for Disclosure" means only those key issues in dispute which the parties consider will need to be determined by the court with some reference to contemporaneous documents in order for there to be a fair resolution of the proceedings.

Both parties accepted that Issue 3(a) was a central issue in the case. RAKIA's case was that it acted lawfully in investigating Mr Azima and that it was not responsible for the unlawful hacking of his data. It argued that the issue must be confined to potentially unlawful steps, as lawful steps could not possibly be a "key issue" for disclosure. However, the judge accepted Mr Azima's submission that it would put a reviewer in an impossible position if they had to decide whether any particular document related to illegal activity.

Further, it was necessary to look at the whole of the evidence and documents since, as the judge put it, something may not appear relevant at this stage and in isolation but may become relevant when put together with other documents or evidence.

The judge considered particular examples where such context may be important, including invoices which on their face had nothing to do with Mr Azima or unlawful hacking of his data, but which Mr Azima alleged concealed what they were really for. In the circumstances the judge concluded that the defendants' proposed limitation to Issue 3(a) went too far and could potentially be used to avoid disclosing what Mr Azima was entitled to see on such a core critical issue.

Model D or Model E disclosure

The judge noted that paragraph 8.3(2) of PD51U provides that Model E "is only to be ordered in an exceptional case". He referred to Kelly v Baker [2021] EWHC 964 (Comm) (considered here), in which Moulder J explained that, since the starting point is the need for an exceptional case, it is not enough to say that a case is relatively high value, that it is important to the claimants or that it involves allegations of fraud. Similarly, in State of Qatar v Banque Havilland SA [2020] EWHC 1248 (Comm), Cockerill J stated that "the disclosure pilot is designed to try to produce something which is more limited than might have been the case in the past; and so it is plainly not enough to say that this is a serious case involving conspiracy and therefore Model E must follow." In particular, she said she would expect Model E to be ordered in fewer cases and in more demanding circumstances than in pre-pilot cases.

Green J in the present case also noted, however, that in a further decision in the State of Qatar case ([2021] EWHC 2172 (Comm)) Mr David Edwards QC, sitting as a High Court Judge, ordered Model E disclosure for a particular issue after more evidence had come to light relating to the respondents' previous attempts at disclosure. His reasons for ordering Model E disclosure included that certain documents had been withheld or were otherwise not available (eg because of mobile phone data being wiped, an email address being deactivated and notebooks being lost), and that the matter related to an alleged covert conspiracy so that it was unlikely that a "smoking gun" would be found.

In the present case, Mr Azima relied on both RAKIA's previous alleged failures in relation to disclosure, including a substantial loss of documents, and on the nature of the alleged wrongdoing to support its case for Model E.

With regard to the alleged failures of disclosure, the judge said that he could not determine whether there had been a deliberate policy of document destruction or lack of candour in RAKIA's approach to disclosure, but there had undoubtedly been a substantial loss of documentation, which put Mr Azima at a serious disadvantage in testing the evidence and the credibility of witnesses and which properly informed the debate about the extent of disclosure that should be required. The judge noted that loss of documents and inadequate previous disclosure were two of the reasons given in State of Qatar for ordering Model E disclosure.

The nature of the allegations was also relevant, as Mr Azima alleged a clandestine conspiracy to hack his confidential data. Those involved in such a conspiracy would be unlikely to create documents that revealed it, which meant that Mr Azima's case would largely have to be built on inferences.

The same considerations referred to above in relation to how broadly or narrowly Issue 3(a) should be defined were also relevant to whether Model E disclosure should be ordered. The judge commented that, "where there has potentially been a cover-up of wrongdoing, there needs to be a mechanism for exploring whether there was indeed a cover-up and, if so, how it worked". Train of inquiry searches may be required in order to understand, for example, how the invoices referred to above relate to the issues in the case.

The circumstances were therefore sufficiently exceptional to justify an order for Model E disclosure on this issue.