De facto control of a third party’s documents. A key battleground for disputes.
15 Jul 2024
3 min read
Disclosure of documents is a critical step to any dispute. Under PD57AD, a party gives disclosure by stating “that a document that is or was in its control has been identified or forms part of an identified class of documents and either producing a copy, or stating why a copy will not be produced”.
It is accepted that an arrangement or understanding which gives a party practical or de facto control of a third party's documents is sufficient to constitute control for disclosure purpose. There does not need to be a legally binding right to access the documents.
What constitutes ‘de facto control’ has been a recent battleground for parties and there has been a large number of recent cases covering it. The latest decision in that arena is: Mornington 2000 Llp (t/a Sterilab Services) & Anor v The Secretary of State for Health And Social Care [2024] EWHC 1708 (TCC) (“Mornington 2000”).
The case concerned contracts for the supply of Covid-19 lateral flow test kits and in Mornington 2000 the Defendant successfully obtained a declaration from the Court that documents held by the Claimant’s subcontractors (suppliers / manufacturers based in Germany and China) should be searched as part of its disclosure obligations.
What are the key points to note?
- The application was successful. It was found the Claimant enjoyed practical control over documents held by its subcontractors. Contrast that with Public Institution for Social Security v Al Wazzan [2024] EWHC 480 where the Court said the relationship of a foreign government body did not have practical control over documents of various other government bodies.
- The Court accepted that this relationship, when compared with previous authorities, “was an unusual case for there to be practical control”. This was a contractor/subcontractor relationship, rather than the more common application concerning group companies. However, the distinguishing feature here was that the relationship between the companies was a close one and, in substance, an effective joint venture. The relationship had gone beyond a standard arm’s length contractor / sub-contractor relationship.
- Contractual assistance clauses helped infer an arrangement or understanding giving the Claimant access to the documents. Most persuasive, however, was the evidence that the Claimant had a history of accessing documents and there was no evidence to suggest a request for access had ever been denied.
- The Court re-stated that it was unnecessary to establish free and unfettered access to documents, just an understanding that access would be permitted; and in this case the Court was satisfied that, if required, the subcontractor would cooperate and provide the documents.
- It was also helpful that the application was focused and confined to the documents responsive to categories in the Disclosure Review Document –the Defendant did not need to argue that all documents held by the subcontractors were within the Claimant’s control, just a specific subset.
Lawyers will welcome the consistent approach of applying the factors in Berkeley Square Holdings Limited v Lancer Property Asset Management Limited [2021] EWHC 849 (Ch) (as slightly modified by recent cases); and with each case, the nuances around the issue of control become clearer. Parties in a dispute need to be mindful that the obligation to preserve, search for and disclose documents can extend beyond their organisation and could include sub-contractors.
Want to discuss the law, technology and practice? Get in touch with our expert team: David Hine, Tom Whittaker and Stacie Bourton.
"The contractual assistance clauses are the starting point for inferring the arrangement or understanding which I find to be present in this case, but there are significant other factors which give rise to that inference, including in particular the evidence of past access to documents being provided by Boson." - Jason Coppel KC: