Disclosure – when can a party obtain documents before proceedings

The High Court has explained what is needed for pre-action disclosure in PMD Business Finance Holdings Ltd v Schofield & Anor [2026] EWHC 10 (KB). The judgment will be of interest to those considering what documents they can obtain before proceedings start, such as in the case of PMD when seeking to enforce restrictive covenants.

The dispute arose following the departure of a former director and shareholder of PMD Business Finance. After leaving the business, the former director became involved in a new finance company, One Funding Ltd. PMD suspected that both the former director and One Funding had engaged in dealings with PMD’s customers, introducers and suppliers in breach of post‑termination restrictive covenants contained in a Service Agreement, a Share Purchase Contract and a Settlement Agreement.

While PMD suspected multiple breaches, it argued that it lacked sufficient information to assess the extent, nature, and impact of any wrongdoing. Instead of issuing proceedings or seeking injunctive relief, PMD applied for pre‑action disclosure to understand whether litigation was necessary or proportionate.

A pre‑action disclosure application under CPR 31.16 allows a potential claimant to obtain documents from a potential defendant before proceedings have begun. 

To succeed, the applicant must show that:

1. Both sides are likely to be parties to future litigation.
2. The documents sought would fall within standard disclosure in that litigation.
3. Early disclosure is desirable — for example, to dispose fairly of anticipated proceedings, assist in resolving the dispute without issuing a claim, or save costs. 

PMD sought targeted disclosure of documents relating specifically to dealings with “restricted” customers, suppliers and introducers during the restricted period. This included:

• Emails, messages and letters;
• Invoices and purchase orders;
• Telephone logs, calendar entries and meeting notes; and
• Confirmation of any documents no longer in the respondents’ control or withheld on privilege grounds. 

PMD argued that these materials would fall squarely within standard disclosure in any future proceedings and were essential to understanding the true extent of any breaches. 

The respondents accepted that both sides were likely to be parties to future proceedings but otherwise resisted the application. They argued that PMD already had enough information to plead a claim, that the request for disclosure was speculative and overly broad, and that CPR 31.16 should not be used to “build” a case before issuing proceedings. Although they provided some voluntarily disclosure, these documents were redacted, which they said was sufficient and proportionate. 

The Court granted PMD’s application, ordering both respondents to disclose communications, financial documents and records of contact with restricted entities during the relevant period. 

In doing so, the Court held that:

• The disclosure sought would fall within standard disclosure in any future proceedings;
• PMD had a properly arguable case that breaches may have occurred;
• Pre‑action disclosure was desirable to allow PMD to assess the scale of any breach, quantify loss and determine whether litigation, particularly injunctive proceedings, was appropriate; and.
• The partial, redacted disclosure provided to date highlighted the need for further clarity. 

Key takeaways are that:

• Pre‑action disclosure is a case-management tool: The Court reaffirmed that CPR 31.16 is not an exceptional remedy but a practical mechanism to narrow issues and avoid unnecessary claims.
• Having enough to plead is not the test: pre-action disclosure may still be appropriate to assess quantum or evaluate whether proceedings are justified.

For more information about the law, technology and practice of disclosure, contact Tom Whittaker or Kate Francis-Hughes.