Disclosure update: predictive coding and the confidentiality/public interest balancing act

An English Court finally approves predictive coding

In our October 2015 commercial litigation newsletter, we discussed the Irish courts' endorsement of predictive coding.¹ Since then, the English courts have followed suit and given the green light to predictive coding in Pyrrho Investments Limited & Anor -v- MWB Property Limited & Ors.²

The growing judicial approval of technology-assisted reviews and predictive coding in electronic disclosure exercises is a welcome development at a time when electronic disclosure is placing an increasing burden on the expense of litigation. Please see our recent article on predictive coding for more detail.

English Court orders the disclosure of documents relating to an SFO investigation and third party client documents

The Court in Harlequin Property (SVG) Limited & Anor -v- Wilkins Kennedy (A Firm) (No 2)³ considered the defendant's unsuccessful application to withhold documents from inspection on the basis of confidentiality. The confidential documents fell into two categories:

• documents created as a result of the Serious Fraud Office (SFO) investigation into the claimants (including draft statements from a partner and an employee of the defendant); and
• documents confidential to the defendant's third party clients.

Documents relating to the SFO investigation

The Court observed that its discretion under CPR 31.19 is a balancing act. "There is a clear public interest in ensuring that the SFO is able to conduct proper investigations on a confidential basis. But that should be balanced against the public interest that the administration of justice should not be frustrated." The ultimate test is whether disclosure is necessary for disposing fairly of the proceedings.

The Court refused the application on the basis that the fair administration of justice, and the need to dispose fairly of the issues in the present highly contentious case, outweighed any public interest in the withholding of certain documents generated by the SFO's investigation. The Court's reasons included:

1. the documents were relevant (even highly relevant) to the issues in the case;
2. the SFO had confirmed that it did not consider that there was any public interest in the withholding of the documents; and
3. the principal partner involved with the project did not object to the disclosure of the documents while another partner's objections were non-specific and unpersuasive.

Confidential third-party documents

The Court refused the defendant's application in regards to the "confidential" third party documents. Its reasoning was as follows.

• Where the third party was involved in the issues in dispute, there would be a real risk that the issues would not be disposed of fairly without inspection of those documents. Further, one of those parties had not objected to their disclosure.
• Where the third party was not involved in the dispute, it was "highly likely" (because of the search terms agreed as part of the disclosure exercise) that these documents would not be relevant and therefore that would be the end of the matter.

This case demonstrates that whether a court will exercise its discretion under CPR 31.19 is highly fact-specific. The Court had taken the opposite view in Tchenguiz -v- Director of the Serious Fraud Office⁴ in regards to confidential documents which had been created during an SFO investigation.

_Notes

_{Irish Bank Resolution Corporation Limited and others -v- Sean Quinn and others [2015] IEHC 175
[2016] EWHC 256 (Ch
[2015] EWHC 3050 (TCC)
[2014] EWCA Civ 1409}