English High Court Rules That Party Has De Facto Control Over Third Party Documents for Disclosure Obligations

Background and Underlying Law

This judgment arises in a claim issued by seven celebrities (the “Claimants”) against Associated Newspapers Limited (“Associated”) in connection with alleged unlawful information gathering, including phone hacking.

As part of the litigation the Claimants engaged a team of specialists, known as the Research Team, who had in-depth knowledge about and experience in unlawful information gathering by various newspapers.

The key issue at this hearing was whether documents held by the Research Team, including documents obtained for other purposes long before the Research Team were engaged by the Claimants, were in the control of the Claimants for the purposes of their disclosure obligations.

Pursuant to CPR 31.8 a party’s duty to disclose documents is limited to documents which are or have been in his control.  For these purposes, a party has a document in his control if (a) it is/was in his physical possession; (b) he has/had a right to possession of it; or (c) he has/had a right to inspect or take copies of it.  It was recognised in Various Airfinance Leasing Companies v Saudi Arabian Airlines Corporation [2022] 1 WLR 1027 that the duty to disclose documents  within a party’s control was not limited only to those situations where a party has a legally enforceable right to access a document. It is sufficient for disclosure purposes if the documents are under the practical control of the party as a matter of factual reality, for example by virtue of an arrangement or understanding which allows access to the third party’s documents.  

The Research Team and the Key Arguments About Their Documents 

In this case, the relevant third party was the Research Team which consisted of three individuals who had years of experience in unlawful information gathering.  As a result, they had a vast amount of potentially relevant documents to the Claimants claim against Associated, which came broadly from the following four sources:

1. Prior investigative work for the Hacked Off campaign against phone hacking from 2011 – 2018;
2. Work carried out in support of claimants in other actions against newspapers for unlawful information gathering from 2017 onwards;
3. Freelance journalism; and
4. Work undertaken for the Claimants in the current litigation pursuant to instructions given by the Claimants’ solicitors.

The Claimants argued that the question of control of the Research Team’s documents had to be considered through the lens of the capacities in which they obtained the documents. There was a distinction to be drawn between (a) documents obtained, accessed or held by the Research Team before their formal engagement in April 2022 (i.e. as a result of their previous roles) which the Claimants argued were not within their control; and (b) documents produced by the Research Team after their formal engagement in April 2022, or documents otherwise provided voluntarily by the Research Team which the Claimants accepted were within their control.

Associated argued that all the Research Team’s documents, regardless of their provenance, were within the Claimants’ practical control. The reality of the arrangement between the Claimants and the Research Team was such that the Claimants could access and be briefed on any of the Research Team’s documents without limitation even before the formal engagement in April 2022, effectively amounting to unfettered access.

The Decision

The High Court ruled that the documents held by the members of the Research Team, including those that came into their possession prior to their engagement with the Claimants, were within the control of the Claimants and must be searched for the purposes of disclosure.

In reaching this decision, the Judge gave particular weight to the following facets of the relationship between the Claimants and the Research Team:

1. The Research Team was formally engaged by the Claimants from April 2022, and from that point onwards acted as agents of the Claimants.  Prior to their formal engagement, from at least 2015, the individual members of the Research Team worked closely with the Claimants’ solicitors and were actively investigating whether proceedings for unlawful information gathering could be brought against Associated and gathering evidence to support any such claim.
2. The Research Team were engaged because they are specialists in unlawful information gathering, that knowledge and experience having been gathered partly from their own investigations outside of their engagement with the Claimants.  The Court inferred that a fundamental part of the rationale for engaging the Research Team was their documents.
3. It is highly likely that members of the Research Team hold documents which are materially relevant to limitation defences and have not been disclosed.
4. The Research Team gave the Claimants access to documents relating to Associated prior to the Engagement Agreement. Despite that the Claimants refused to disclose the Engagement Agreement on grounds of privilege;[1] there was no suggestion by the Claimants that there were any restrictions imposed on the sharing of documents or that the Research Team withheld any documents from the Claimants. This was further supported by the fact that shortly before the hearing, the Research Team agreed to allow full access to their documents for searches to be carried out by the Claimants’ legal team.
5. The primary purpose of the Engagement Agreement is for the Research Team to assist the Claimants in the litigation which includes giving them unfettered access to their documents.

The court was unable to resolve the question of whether the Claimants had an enforceable right of access to the documents because the Engagement Agreement was not disclosed. However, even in the absence of the Engagement Agreement the court was satisfied that based on its intent and the parties’ relationship, the Claimants had unfettered access to the Research Team’s documents. The fact that there may be some documents subject to restrictions arising from other litigation or journalistic sources did not undermine the basic nature of co-operation between the Claimants and the Research Team. 

This case could be distinguished from the decision in Loreley Financing (Jersey) No.30 Ltd -v- Credit Suisse Securities (Europe) Ltd [2023] EWHC 548 (Comm), where the third party held the documents  in a specific capacity that was wholly separate from his role as agent for the disclosing party. Here the Research Team were engaged because of their specialism, knowledge and documents relating to unlawful information gathering by Associated and others. The status of each member of the Research Team at the time they originally took possession of the documents had no bearing on whether those documents were now in the practical control of the Claimants (though it may be a relevant factor in deciding whether any such documents should be provided for inspection).

Key Takeaways

When determining disclosure obligations, the High Court will look beyond any contractual rights that a party has to access a third party’s documents and will consider any arrangements or understandings which give a party access to a third party’s documents.

While in this case the past sharing of documents was a relevant and important factor, this alone will not be determinative of the existence of practical control. The court explored the boundaries of the concept of practical control over third party documents in the decision in The Public Institution for Social Security v Al-Wazzan [2024] EWHC 480 (Comm) (a claim in which Dechert acted for certain of the Defendants) and held that documents in the possession of a number of third parties, including governmental and non-governmental entities, were not within the practical control of the Claimant (The Public Institution for Social Security, itself a government entity), notwithstanding the prior sharing of documents over short periods and for specific purposes.  Therefore, each case will turn on the particular circumstances of the party/third party relationship and the practice of document sharing.

Before engaging in arrangements which may involve document sharing with any third party (including companies within the same group) consider carefully (a) the scope of the access to, and exchange of, documents that those arrangements would allow; and (b) exactly what documents that third party might hold and their implications in any litigation.

While in some contexts it may seem advantageous to have the greatest possible access to the third party’s documents, in a litigation context this could prove to be a double-edged sword. Accordingly, clear limits on what can and cannot be shared could protect both parties.