REUTERS | Ralph Orlowski

Pre-action and non-party disclosure

There has been a number of recent cases in relation to pre-action and non-party disclosures.

In Pharmacy2u Limited v The National Pharmacy Association, a Chancery Division master dismissed an application for pre-action disclosure under CPR 31.16. The judgment considers the meaning of “proceedings” in CPR 31.16 (3)(d) and sets out factors which may count against such disclosure being “desirable” within that rule, which reads:

“(3) The court may make an order under this rule only where –

(a) the respondent is likely to be a party to subsequent proceedings;

(b) the applicant is also likely to be a party to those proceedings;

(c) if proceedings had started, the respondent’s duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and

(d) disclosure before proceedings have started is desirable in order to –

(i) dispose fairly of the anticipated proceedings;

(ii) assist the dispute to be resolved without proceedings; or

(iii) save costs”.

Pharmacy2u is the United Kingdom’s largest online pharmaceutical retailer and the National Pharmacy Association is a long established trade association representing 3,202 members.

The association distributed a notice to its members, for display to the public, pointing out that Pharmacy2u was nothing to do with the pharmacist and the fact that Pharmacy2u had been fined £130,000 for selling patients’ details to marketing companies, including an Australian Lottery, had failed to send out prescriptions for three weeks over Christmas 2015 and had been found by the Care Quality Commission to be “not safe, effective or well lead.”

None of these facts is disputed by Pharmacy2u, but it said that the National Pharmacy Association had infringed its trade mark by using it in the notice.

The claimant sought pre-action disclosure of the names and contact details of all members to whom the notice had been sent or by whom it had been downloaded, contending that this information was necessary to enable it to understand the extent of the damage and so that it could contact the members to address ongoing harm.

It was common ground that CPR 31.16 (3)(a) -(c) were satisfied and thus the issue was whether it was desirable under (d).

The court held that the order was not necessary in order for the proposed claimant to understand the extent of the damage, as the claimant had sufficient information to plead its case and the respondent had identified the number of its members involved.

As to the meaning of proceedings, the court held that this meant the proceedings against the respondent to this application and not against anyone else, but that if it was wrong about that, then disclosure was not necessary to dispose fairly of these proceedings. Rather, it was to enable the proceedings to be brought by supplying the contact details of potential defendants.

In any event, the disclosure sought was neither necessary nor desirable. The respondent, as the alleged primary wrongdoer, would be liable for any damages and there was no suggestion that it could not pay, nor that it would fail to instruct its members to stop distributing the notice and to destroy any copies.

It was not necessary for the claimant to join the respondent’s members in order fairly to resolve the claim, and it was neither desirable nor proportionate to order disclosure to enable claims to be made against 3,202 members for alleged minor infringement.

The court also had this to say:

“31. In this context, assuming, again for the sake of argument, that NPA has a good defence to P2U’s claim, then there is a risk that the effect of providing P2U with the members’ names and contact details will be that NPA will not have the opportunity to establish that defence. If P2U writes letters before claim to the members, threatening proceedings, injunctive relief, and orders for significant damages and costs, the practical reality is that most members are likely not to involve themselves in contested litigation for all the usual reasons, even if supported by NPA. They were not responsible for the wording of the Notice; and have no direct knowledge of its truth or falsity. There is a serious risk, therefore, that P2U would therefore be able to “pick off” the individual members, without ever having to submit to a judicial determination of the merits of its claim.

32. These concerns are reinforced to a degree by P2U’s conduct to date. When it first wrote to NPA in December 2017, it alleged that the statements in the Notice were untrue, and threatened claims for defamation and malicious falsehood. Following NPA’s solicitors’ response, these were withdrawn. In addition, Mr Strachan’s evidence is that P2U’s solicitors wrote to him personally, threatening to make a complaint about him to the General Pharmaceutical Council. Finally, Mr Strachan also gives evidence of a GP practice which, having displayed the Notice received correspondence he describes as “very intimidating”, instructing them to remove it and threatening to report them to their regulatory body, the General Medical Council. This evidence was not challenged in P2U’s evidence in reply.”

The court also declined, for the same reasons, to make a Norwich Pharmacal Order, that is an order for the provision of information as per the case of Norwich Pharmacal v Customs and Excise Commissioners.

Non-party disclosure: necessity test to be applied flexibly

In Sarayiah v Royal and Sun Alliance Plc and others, a High Court judge allowed an appeal by an applicant litigant in person and granted a non-party disclosure order against the respondent insurance company. It held that the lower court had erred in refusing to make the order on the basis that the applicant should have made a specific disclosure application under CPR 31.12 against another party.

The court rejected the argument that a non-party disclosure application should not succeed if the documents are available from another source, meaning that disclosure is not “necessary” to dispose fairly of the claim or to save costs. Rather, the flexible Norwich Pharmacal approach to necessity should be applied to CPR 31.17 applications.

Here, the applicant had sued his sisters for harassment and alleged that they had removed him as an interested party on an insurance policy, causing him considerable loss. He sought disclosure from the respondent of a tape recording of a telephone call between the sisters and the insurance company concerning the policy change.

The lower court refused his application, stating that he should have sought specific disclosure from the sisters. The applicant then applied to a different judge for such specific disclosure, but it was refused on the erroneous basis that the sisters lacked control of the tape recording, the sisters having failed to tell the judge that they did in fact have a copy of that recording.

On appeal, the High Court judge said that he could not see what considerations the lower court judge had taken into account, except his view that the applicant had alternative means of obtaining the disclosure, which he apparently, and wrongly, regarded as preventing a non-party disclosure order.

The lower court had failed to consider the relevant factors, such as the applicant’s position as a litigant in person seeking a document which the respondent had in its possession. The lower court had also failed to consider the sisters’ unwillingness to cooperate and whether an application under CPR 31.12 would have been problematic, which in fact it turned out to be.

Here, the criteria in CPR 31.17 were met and it would be disproportionate to require the applicant to make yet another application, this time under CPR 31.12, to obtain disclosure of the tape recording.

The court held that an order for disclosure against the respondent was necessary to dispose fairly of the claim.

Defendant succeeds in pre-action disclosure application

In EUI Limited v Charles and others, the county court ordered the claimants to give pre-action disclosure of documents relating to impecuniosity in a credit hire case.

Here the applicant insurer was facing potential actions by seven individuals whose cars had been damaged in accidents. All of them had hired alternative vehicles from credit hire companies and the defendants sought, and obtained, disclosure of bank statements and wage slips for the three months before the hire.

A claimant can normally only claim a basic hire rate, but an impecunious claimant can claim the full credit hire charge, not limited to the basic hire rate, provided that the full charge is not unreasonably high.

Impecuniosity is also relevant to the period of hire, and therefore the issue of the claimants’ finances is generally central to such cases.

Here, the applicant insurance company successfully argued that it should be able to assess if a potential claimant is impecunious in order that it could value and settle the claim without litigation if appropriate.

Successful applications for pre-action disclosure by defendants are rare.

Each case will depend upon the facts, but the decisions here and in Sarayiah may indicate a more liberal approach by the courts to pre-action disclosure applications.

The Pharmacy2u case goes the other way, but that is unsurprising on the facts, and given the general conduct of Pharmacy2u.

The general lesson here is that all litigators should always consider the issue of an application for pre-action disclosure, bearing in mind the current establishment view that litigation should only be engaged in as a last resort.

Leave a Reply

Your email address will not be published. Required fields are marked *

Share this post on: