When is an Interested Party, a Party. And do they have to disclose documents? (Procurement Update)

“When is a Party not a Party?”  This is not a brainteaser or an off-the-wall interview question, but a question the Court had to consider when determining if Allwyn Entertainment (being neither claimant nor defendant) should be forced to search for, and hand over, certain documents in a procurement dispute.  Allwyn was present as an interested party because it was the winning bidder which wanted to preserve the award to it.  But how do the court rules (CPR 31.12) apply where they say: “An order for specific disclosure is an order that a party must…"  ?

Summary

In our recent article, on "The Risks and Benefits of Interested Party Status", we explored the judgment on an interim security for costs application in the long running procurement litigation between The New Lottery Company and another v The Gambling Commission. That judgment clarified that while Interested Parties (IPs) can take an active role in procurement disputes, they remain procedurally distinct from claimants and defendants and are not entitled, therefore, to security for costs. However, the judgment also demonstrated that IP involvement can offer strategic advantages. 

The latest judgment in the same litigation arose from the Claimants’ application for disclosure against Allwyn, as IP (and Rothschild, a non-party, but we focus on Allwyn). It builds on earlier procedural rulings and provides further clarification on how IPs are treated under the Civil Procedure Rules (“CPR”), particularly in relation to disclosure. 

In this judgment the court confirmed that, when considering the use of the term “parties” in the CPR, IPs are not by default “parties” for all purposes. In particular, IPs are not automatically “parties” for the purposes of CPR 31.6 (standard disclosure).  However, on the specific facts of this case, this IP (Allwyn) was a “party” for the purposes of CPR 31.12 (specific disclosure against a party). 

The rationale behind this conclusion has implications for IPs taking a more active role in proceedings, as Allwyn did.  Oversimplifying slightly, this judgment confirms that the more an IP acts like a “party” (i.e. obtains court Orders giving it permission to take certain actions and participate in certain ways) the more likely the court will find that IP is one of “the parties” for the purposes of CPR rules connected with those rights of action and participation:

“… the position of that interested party depends on what orders are made by the court. The court has a wide power to order that an interested party may be permitted or entitled to participate in particular applications, hearings or issues. That participation does not make it automatically a party to the proceedings but the orders given by the court will have consequences. For instance, in this case the relevant order provided for Allwyn to serve a statement of case. The Allwyn Statement of Case referred to documents and the consequence of that would, in my judgment, be that the court would treat Allwyn as a party for purpose of CPR r.31.14 if, as occurred, a party to the proceedings sought to have a copy of any documents which had been referred to in the Allwyn Statement of Case.”

The Court has reached a logical solution in circumstances where, as the court observed in this case, “Apart from [a small number of references] there is little said as to the consequences of being an interested party.” However, this judgment having clarified the principle, the implications are something which IPs ought to take into account when considering the pros and cons of more extensive involvement.

IPs are generally entitled to watch from the sidelines whilst benefiting from greater access to the litigation than a third party would have.  However, the more they get involved in the game, the more they can expect to be subject to the rules of the game.

Further specifics of this case

A central theme of the judgment (paras 40–46) is the procedural status of IPs. The court confirmed that an IP is not automatically a “party” to proceedings in the same way as a claimant or defendant - a distinction that carries particular significance for disclosure obligations. While standard disclosure under CPR 31.6 applies only to “parties”, the court made clear that it may treat an IP as a party for the purpose of a specific procedural rule, such as disclosure, depending on the nature and extent of their involvement (para 46).

Allwyn had taken an active role in the proceedings, including filing a Statement of Case and responding to a Request for Information (“RFI”); steps more typical of a defendant than a passive IP. The court accepted that facts relied upon in those documents should be tested through evidence. Despite this, the court drew a procedural boundary. It held that the burden of ‘standard disclosure’ under CPR 31.6 remained with the claimants and the defendant. Allwyn was not subject to standard disclosure simply by virtue of its more extensive involvement in these proceedings. Instead, the court was prepared to order targeted disclosure under CPR 31.12 (specific disclosure against a party) rather than CPR 31.17 (disclosure order against a non-party to the litigation). The court emphasised that CPR 31.12 will only apply where the IP’s role justifies party-like treatment (paras 40–46). 

The position on this application was therefore that:

• Standard disclosure under CPR 31.6 does not apply to IPs by default. 
  • The judgment reinforces that this remains the preserve of claimants and defendants.
• A targeted disclosure order aka ‘specific disclosure’ under CPR 31.12 is available
  • But only where the court is satisfied that the IP should be treated as a party for that purpose.
• CPR 31.17 (non-party disclosure) remains a viable alternative
  • Particularly where the IP has not taken on an active role. But the threshold test (a test of necessity) is higher than for specific disclosure. 
• The court’s approach is determined on a case-by-case basis. 
  • Where an IP has taken on a more active role (as Allwyn did), it may be treated as a party for specific purposes, but this does not equate to full party status across the board.

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This article was co-authored by Lloyd Nail and Alice Gillie, part of Burges Salmon's 'Chambers Band 1' Procurement Team, specialising in Public procurement advisory and disputes.

“… the position of that interested party depends on what orders are made by the court. The court has a wide power to order that an interested party may be permitted or entitled to participate in particular applications, hearings or issues. That participation does not make it automatically a party to the proceedings but the orders given by the court will have consequences. For instance, in this case the relevant order provided for Allwyn to serve a statement of case. The Allwyn Statement of Case referred to documents and the consequence of that would, in my judgment, be that the court would treat Allwyn as a party for purpose of CPR r.31.14 if, as occurred, a party to the proceedings sought to have a copy of any documents which had been referred to in the Allwyn Statement of Case.”