When does a party have "practical control" over sub-contractor and sub-sub-contractor documents?

Our colleagues recently published a post on the High Court's decision in Mornington 2000 LLP (t/a Sterilab Services) and Anor v The Secretary of State for Health and Social Care [2024] EWHC 1708 (TCC), in which it was held that a party to the proceedings had "practical control" over a sub-contractor and sub-sub-contractor's documents. Whilst this case related to a contract for the supply of Covid-19 lateral flow test kits, the principles are also relevant to disclosure in construction disputes given the typical sub-contracting arrangements adopted in construction projects. We set out below some of the practical implications which parties in the construction industry ought to bear in mind both prior to and when a dispute arises.

With the assistance of their legal advisors, sub-contracting parties should:

• Carefully draft contractual assistance clauses.

Contractual assistance clauses provide that one party to the contract (the "assisting party") will assist the other party at its request if a dispute arises against a third party. Such assistance might include the provision of documentary evidence, and, in a construction context, the assisting party would likely be a sub-contractor or sub-sub-contractor.

When drafting the contract, it is important to clearly define the scope, nature and extent of the assistance to be provided; and who should bear the cost. This will provide certainty as to whether the request for assistance is valid and enforceable and, assuming it is, will ensure the assisting party knows what it is required to do when a request for assistance is made.

In the Mornington 2000 case, the contractual assistance clauses were drafted broadly so the judge held the disclosure obligation extended to documents which were unhelpful to the litigant's case. That said, even if a contractual assistance clause explicitly states that the assisting party is only required to provide helpful documents, if potentially relevant documents are within the litigant's "practical control" then its disclosure obligations will ordinarily override the terms of the parties' contract. 

• Consider the practical impacts of making a request for assistance.

At an early stage of proceedings, sub-contracting parties and their legal advisors should consider how to effectively collate, process, review and disclose all potentially relevant documents in the possession of the assisting party, but over which the litigant has "practical control". The assistance of an external document review team may be necessary.

If construction activities are still in progress, it would also be worth considering whether extensive requests for documents to be collated and reviewed by the assisting party could divert its internal resources from planned construction activities. If so, the assisting party may claim that the requests constitute an act of prevention, which entitle it to an extension of time. And even if such claims are not made, very broad requests are less likely to be met with a positive response.

Given the above, and unless the contract expressly stipulates which party takes on the risk of delay arising from requests for assistance, the party making the request should carefully consider how each request is framed. Ideally, the scope of the requests should be clearly defined to incentivise compliance. Of course, this will require the litigant to strike a balance between formulating the requests so that they are not overly burdensome for the assisting party, whilst simultaneously ensuring compliance with its duty to disclose all relevant documents.

Considering whether only certain categories of documents are within the litigant's "practical control" will be one way of narrowing the requests and, therefore, reducing the burden on the assisting party. For example, in the Mornington 2000 case, the litigant was only found to have "practical control" over certain categories of documents in the Disclosure Review Document, which would have limited the assisting party's document review set.

• Consider how the parties' business relationship is structured.

The courts will also consider the nature of the relationship between the parties.

In the Mornington 2000 case, the parties' relationship was akin to a joint venture, with the court holding that the relationship went "beyond a standard, arm's length contractor/sub-contractor/sub-sub-contractor relationship". Whilst joint venture arrangements are common in the construction industry, it is not entirely clear whether the same view would be taken of consortium-type arrangements, where there can be a higher degree of independence between each contracting party.

Ultimately, whether one party has "practical control" over another party's documents will remain a question of fact in each case.

• Be aware that conduct prior to and during proceedings may help establish that one party has "practical control" over the assisting party's documents.

Determining whether a party has "practical control" over documents requires a detailed consideration of the factual matrix, including the degree of cooperation and assistance given to the litigant prior to and during the dispute.

In the Mornington 2000 case, the court held that the fact the assisting party had previously provided documents in response to requests, and the likelihood of the assisting party supplying further documents if requested in the future, pointed to the litigant having "practical control" over such documents.