ABA INTERNATIONAL DISCOVERY BOOK

Transcription

1 ABA INTERNATIONAL DISCOVERY BOOK UNITED KINGDOM (ENGLAND AND WALES) 1 A. OVERVIEW Documentary and oral testimony in the normal course standard procedure The English High Court may order the taking of evidence in England and Wales 2 at the request of a US (or other non-uk) court pursuant to the Evidence (Proceedings in Other Jurisdictions) Act 1975 (the Evidence Act ). There is no inherent jurisdiction to act in aid of the US court and the powers available to the English court are limited to the scope of this statute. The general principle which is followed in England in relation to a request from a US court for assistance in obtaining evidence in foreign proceedings is to give effect to that request so far as is proper and practicable and to the extent that is permissible under English law. Like the US, England has a common law civil judicial system. Although the Court has wide powers to act of its own motion, the system is adversarial as opposed to inquisitorial, and relies in practice almost exclusively on the parties to investigate and present their cases. Once proceedings have commenced, the main steps are: (a) (b) (c) (d) (e) written statements of case (pleadings); disclosure of documents, including electronic documents (equivalent to discovery in US proceedings but generally more restricted than in the US); exchange of written statements of all factual witnesses to be called at trial (which will stand the witnesses evidence in chief at trial; exchange of written reports of expert witnesses (where expert evidence is required); trial an oral hearing before a single judge (but with no jury, except in some defamation cases at which counsel make oral and written submissions, factual and expert witnesses are crossexamined orally by the opposing party, and documentary evidence is available to the judge. Unlike in US proceedings, litigation in England does not have an oral discovery/deposition stage. Special types of disclosure order There are also various types of interim relief orders which the English Court can make to support US or other foreign proceedings. Some of these orders will require the recipient to disclose information or documents (or both) to the applicant. These special types of disclosure order are discovered in more detail in a separate section C below. 1 Prepared by Gavin Foggo (Partner) and Sabrina Janzik (Associate, Registered European Lawyer) with Fox Williams LLP in London. They specialize in UK and international business litigation and arbitration. 2 The United Kingdom comprises three jurisdictions: (i) England and Wales, which is easily the largest; (ii) Scotland; and (iii) Northern Ireland. This article is concerned with (i) only, which for brevity will be referred to as England. 1

2 B. DISCOVERY PROCEDURE UNDER THE EVIDENCE ACT AND HAGUE CONVENTION The Evidence Act was passed in the United Kingdom in order to give effect to the principles of the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters of 1970 (the Convention ) which the United Kingdom ratified in Article 23 of the Convention was intended to permit states to ensure that a request for the production of documents must be sufficiently substantiated so as to avoid requests whereby one party merely seeks to find out what documents may generally be in the possession of the other party to the proceedings. The UK declaration reads as follows: In accordance with Article 23 Her Majesty s Government declare that the United Kingdom will not execute Letters of Request issued for the purpose of obtaining pretrial discovery of documents. Her Majesty s Government further declare that Her Majesty s Government understand Letters of Request issued for the purpose of obtaining pre-trial discovery of documents for the purposes of the foregoing Declaration as including any Letter of Request which requires a person: a) to state what documents relevant to the proceedings to which the Letter of Request relates are, or have been, in his possession, custody or power; or b) to produce any documents other than particular documents specified in the Letter of Request as being documents appearing to the requested court to be, or to be likely to be, in his possession, custody or power. This restriction on Article 23 (and the resulting section 2(4) of the Evidence Act) limits the much more extensive procedures available in the US which can include wide ranging requests for non-parties to the action to make oral depositions or to produce documents which may not necessarily be relevant to the issues but could possibly assist the plaintiff to formulate allegations against the defendant 3. The Evidence (Proceedings in Other Jurisdictions) Act 1975 The spirit of the Evidence Act is to enable judicial assistance to be given to foreign courts 4. It gives the court the power to comply with letters of request from judicial authorities in other states. While this power is at the discretion of the English court, it has been said that it is the duty and pleasure of the English court to give all such assistance as it can to the requesting court 5. The Evidence Act does not reproduce the provisions of the Convention but contains additional material and is drafted with the intention of being able to apply to all types of request. An application to the English Court for assistance in obtaining evidence for civil proceedings in a court outside the UK should be made in pursuance of a request issued by or on behalf of the court outside the UK 6. The English Court must also be satisfied that the evidence is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated 7. Where the foreign proceedings have been settled or discontinued the request will be refused 8. Procedure 3 Dicey, Morris & Collins, The Conflict of Laws, Volume 1 (2012) p Re Asbestos Insurance Coverage Cases[1985] I All ER United States of America v Philip Morris Inc (2004) EWCA Civ Section 1(a) 7 Section 1(b) 8 Re International Power Industries Inc, The Times, July 25, 1984 (1985) B.C. L.C

3 Under the UK Civil Procedure Rules ( CPR ) 9 an application for an order under the Evidence Act must be made to the High Court. It must be supported by written evidence and accompanied by a letter of request as a result of which the application is made. The application may be made without notice ( ex parte ) on paper (without a hearing). The High Court then has the power to order the obtaining of such evidence in England as appears appropriate to it for the purpose of giving effect to the request in pursuance of which the application is made. The ex parte order must be served on the recipient and on the other parties to the US litigation. They or the recipient may apply to have the ex parte order varied or set aside. Such application will be supported by written evidence and determined at an inter party hearing. Scope of Discovery An order under the Act will only require steps to be taken if they are steps which can be required to be taken by way of obtaining evidence for the purposes of civil proceedings in the court making the order 10. The civil proceedings have to be proceedings in any civil or commercial matter 11 under both English law and the law of the US court. Whilst there is no internationally accepted definition of civil or commercial proceedings, for the purposes of English law this includes all proceedings other than criminal proceedings. In the absence of evidence to the contrary, the English court will accept the statement of the foreign court in its request that the evidence is required for the purposes of civil or commercial proceedings in that court. Section 2(3) of the Evidence Act provides that: an order under this section shall not require any particular steps to be taken unless they are steps which can be required to be taken by way of obtaining evidence for the purposes of civil proceedings in the court making the order (whether or not proceedings of the same description as those to which the application for the order relates); but this subsection shall not preclude the making of an order requiring a person to give testimony (either orally or in writing) otherwise than on oath where this is asked for by the requesting court. The English Court can therefore go no wider than what would be ordered in English proceedings. As regards documentary discovery (known as disclosure in England) under Part 31 of the CPR the most common order is for standard disclosure, which requires a party to disclose only: 1. the documents on which he relies; 2. the documents which adversely affect his own case; and 3. documents which harm or assist another party s case. The request must therefore not be of a wide-ranging investigatory nature, or seeking neutral background documents or train of inquiry documents (often referred to as documents reasonably calculated to lead to the discovery of admissible evidence in the US, which are not themselves relevant to the issues in the case but which might lead a party to the discovery of documents which could be relevant). Instead, the evidence sought must be helping or harming one party s case. In Tinto Zinc Corporation v Westinghouse Electrical Corporation, the House of Lords (then the highest appeal court in the UK, equivalent to the US Supreme Court, now known as the UK Supreme Court) held that where the High Court has the jurisdiction to make an order under the Evidence Act, the court will not exercise its discretion in favour of refusing to make an order unless it is satisfied that the application would be regarded as frivolous, vexatious or an abuse of the process of court 12. It has wide powers in giving effect to the application for assistance. The court may in particular make provision for the examination of witnesses either orally or in writing, for the production of documents, for the 9 See CPR to and Practice Direction Section 2(3) 11 Section 9(1) 12 [1978] A.C 547 3

4 inspection, photographing, preservation, custody or detention of any property, for the taking of samples of any property and the carrying out of any experiments on or with any property, for the medical examination of any person and for the taking and testing of samples of blood from any person 13. Documentary Evidence Under the Evidence Act, the English Court cannot make a general discovery order to produce all relevant documents, as would typically be made in US proceedings. Nor can the English Court order that classes of documents be produced. The request must not be a wide ranging investigatory examination but must seek to obtain evidence for direct use in proceedings. 14 The statutory reference to particular documents specified in the order is to be given strict construction. In the case of Re Asbestos Insurance Coverage Cases the House of Lords formulated a test to be applied to determine whether documents are particular documents specified in the order. It was held that the test to be applied in relation to the production of documents was: 1. whether particular documents were specified, which was construed as meaning individual documents separately described 15 ; and 2. that the documents were actual documents in respect of which evidence could be produced to satisfy the judge that they exist or have existed. In this particular case, the House of Lords refused to order disclosure of the documents which included 1) written instructions from the respondents to obtain specimen insurance policies, 2) written instructions to obtain certain other specimen insurance policies and 3) exemplars of certain excess comprehensive policies in use in the London insurance market during the period In respect of the first two categories, it was held that these were conjectural documents which might or might not exist and there was no evidence that there was usually a single document or set of documents by which written instruction for policies were transmitted. The third category was refused as it was clearly a description of a class of documents and not of particular documents. The class was also not clearly defined and the policies could not be distinguished from policies of other firms, leaving the request far too wide to be given effect to by the English court. In this case, it was suggested that the letters rogatory should be sent back to the Californian Court to be reconsidered by the judge with a view to them being amended and restricted. This is a key point in practice. It is vital for the letter of request from the US Court and the application to the English Court to specify individual particular documents, otherwise the English Court will reject the request as being too wide. The stage at which the order is sought will be relevant, along with the extent to which the party seeking the order can demonstrate that the evidence to be obtained is relevant to the proceedings. In relation to requests from the US, the UK court will consider anything that indicates that the party that obtained the order and the judge who authorised the letter of request, appreciated and took into account the differences between the procedural rules of the different jurisdictions. 16 The English Court has the power to reject the whole or part of the request for oral or documentary evidence and will refuse parts of the order it considers excessive. Whilst the English Court can make minor amendments to the request if drafted in a way it considers unacceptable, it has no powers to modify the original foreign request so as to substitute a category of documents different to those requested by the foreign court. Oral Testimony orders for depositions 13 Section 2(2) 14 Re Westinghouse Uranium Contract Litigation MDL Docket No 235 [1978] AC Re Asbestos Insurance Coverage Cases [1985] 1 All ER First American Corp v Zayed [1999] 1 W.L.R 1154 (CA) 4

5 Whilst depositions do not exist in English civil proceedings, the English Court will make orders in appropriate cases for depositions to take place in England to assist in US proceedings. Where such a request is made to the English Court, the request should only be acceded to where there is sufficient ground for believing that an intended witness might have direct evidence to give on topics relevant to the issues in the case 17. The decision regarding what is relevant is primarily a matter for the foreign court and the English Court should therefore accede to the request unless it would not be proper to do so or where the burden imposed on the intended witness was oppressive. In First American Corp v Zayed, it was held that when considering letters of request, the English Court should ask two questions. First, whether the intended witness can reasonably be expected to have relevant information to give on the topics of the testimony and, second, whether the intention underlying the formulation of these topics is intended to obtain evidence for use at trial rather than being purely investigatory and therefore impermissible. A balance must be struck between the legitimate requirements of the foreign court and the burden that this would place on the intended witness. If necessary, the English Court will apply some safeguards against a wide-ranging examination 18. Privilege of witnesses A party required to give evidence in England pursuant to a request from a foreign court has the protection of the English rules of privilege and those of the law of the requesting court, by virtue of section 3 of the Evidence Act. In order to claim privilege under US laws, there must be a statement to that effect contained in the request to the English Court, or it must be conceded by the applicant for the order. In United States v Philip Morris 19, it was held that for an entire request to be refused on the grounds of privilege, the party must show that he would be unable to answer any questions within the scope of the request to which he cannot claim privilege. The witness must claim privilege on a question by question basis if only some of the issues are privileged - he cannot have the entire request refused. In addition, a person will not be compelled to give evidence if his doing so would be prejudicial to the security of the United Kingdom. The Secretary of State must sign a certificate to that effect, which will be conclusive evidence of that fact 20. C. SPECIAL TYPES OF DISCLOSURE ORDER Section 25 of the Civil Jurisdiction and Judgments Act 1982 Section 25 of the Civil Jurisdiction and Judgments Act provides that the English court may grant interim relief in support of foreign court proceedings worldwide. The types of interim relief that are available to litigants include: restraining orders; search orders; freezing orders (including worldwide freezing orders); and disclosure orders. Some of these types of order will involve the obtaining of preservation of documents, and thereby provide an additional avenue by which a party to US proceedings may in certain circumstances obtain documents from a person in England. An application under section 25 of the 1982 Act is completely different to one under the Evidence Act, and is generally more time-consuming, urgent and expensive. Detailed written evidence must be provided by the applicant to support his application, which would normally be granted at an ex parte oral hearing. Once the order has been made ex parte and served on the respondent, it can be challenged by the respondent at an inter partes hearing. In general the court will only exercise its discretion if the relief is sought in respect of foreign civil proceedings and only after the court has carefully considered the facts of each case and is satisfied that 17 First American Corp v Zayed [1999] 1 W.L.R 1154 (CA) 18 Re Tinto Zinc Corporation v Westinghouse Electrical Corporation [1978] A.C [2004] EWCA Civ Section 3(3) 21 As extended by the Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order 1997 (SI 1997/302). 5

6 it is not inexpedient to grant the relief sought. Case law provides some guidance on what is presumed to be expedient. 22 There are five considerations which should be borne in mind when exploring whether it is expedient to make an order under section 25, including whether the order can be enforced: 1. It will generally be expedient to grant relief if the respondent is resident in England or has any other links to England; 2. It will generally be inexpedient to grant relief if the primary court has the power to grant such interim relief but for whatever reason - decided not to exercise its power; 3. It will generally be inexpedient to grant relief if it would result in inconsistent orders being made across different jurisdictions; 4. It will generally be inexpedient to grant relief when there is a high probability that a foreign defendant will disobey an order; and 5. The English court must also consider whether the facts before it would justify the granting of the relief sought if the proceedings on the merits had been brought in England, i.e. the requisite English legal standards must be met. While the courts accept that a cautious approach must be adopted in exercising this discretion 23 they are going to lengths to find ways of granting freezing orders or disclosure orders sought in fraud cases, or where the judge considers the defendant is seeking to evade enforcement. In in RBS v FAL Oil Company Ltd and Ors 24 interim relief was granted even where the assets were outside the jurisdiction. The quintessence is that where there is a real connecting link between the jurisdiction and the subject matter of relief sought this is sufficient to justify granting the orders. The types of order which a party to the US proceedings can obtain against a person in England, pursuant to section 25 of the 1982 Act, include the following orders which are available to litigants in English proceedings: a Norwich Pharmacal order; a Bankers Trust order; and a search and seizure/anton Pillar order. These are explained further below. (i) Norwich Pharmacal order An order of this sort, named after the case in which it was first posited 25, requires the respondent to disclose certain documents or specific information to the applicant. Its most common purpose is to compel an individual to divulge information he possesses that could assist the applicant in identifying a wrongdoer against whom the applicant wishes to bring proceedings. Usually the respondent to a Norwich Pharmacal order will be an innocent third party who has facilitated or become caught up in the tortious acts of a wrongdoer. The respondent is assumed to be in possession of information, without which the potential claimant cannot commence proceedings, properly plead his case or define the full nature of his potential case 26. By way of example, perhaps the third party is known to be privy to information that identifies the name or contact details of a wrongdoer or has come into possession of financial information necessary to identify him. 22 E.g. decision of the Court of Appeal in Motorola Credit Corporation v Uzan [2003] EWCA Civ JSC VTB Bank v Pavel Valerjevich Skurikhin and Ors [2012] EWHC RBS v FAL Oil Company Ltd and Ors [2012] EWHC Norwich Pharmacal Co. v Customs and Excise Commissioners [1974] AC Arab Monetary Fund v Hashim (No 5) [1992] 2 All ER 911 6

7 The courts have been clear that such an order s ambit is not restricted to actions in tort. It is a general order that may, for example, equally well apply to cases of breach of contract 27, defamation 28 or any other classification of action. As an ostensibly flexible order, it may be obtained either pre-action, during the course of proceedings or after judgment to assist with enforcement. In practice, it is common to see the Norwich Pharmacal jurisdiction exercised at the start of another order, often as a precursor to search and seize orders or asset freezing orders. The jurisdiction is not exercisable simply to appease curiosity or satisfy a frivolous interest; hence any applicant will need to demonstrate that he has a real interest in seeking redress against the alleged wrongdoer. However, the courts have shown that they are willing to grant such an order in circumstances other than when the claimant is committed to litigation 29, for example, in circumstances where the intended redress amounts to other forms of non-judicial action 30. An applicant will fail, however, if the innocent respondent is a mere witness. Mere witnesses may be in possession of information but are not so involved as to be considered facilitators nor could they properly be considered mixed-up in the wrongdoing 31. According to the Justice and Security Act 2013, a court may not order the disclosure of information pursuant to a Norwich Pharmacal order if that information is sensitive 32. This is mainly information held by, derived from or related to an intelligence service or information named in a certificate by the Secretary of State. Such a certificate may be issued by the Secretary of State listing certain information or documents that cannot be disclosed (or their existence even recognised) if it would be contrary to the public policy to do so. Since the respondent is more likely to be innocently involved in the matter, the applicant may have to agree to a cross-undertaking in damages for the purpose of indemnifying the respondent for any loss suffered in providing the information. That said, it is common for the applicant eventually to recover these costs from an unsuccessful defendant 33. It is noteworthy that the courts are willing to grant such an order in aid of proceedings in foreign jurisdictions 34. Moreover, it is also possible to obtain an order in England to extract the identity of a wrongdoer who is under the law of a country other than the UK 35. (ii) Bankers Trust orders A Bankers Trust order is considered as a natural extension of the Norwich Pharmacal order discussed above. Also named after the case in which it first appeared 36, this order demands a third party (often a bank) to disclose information and/or documents relating to the financial state and dealings of the defendant in order to assist in the tracing of monies. However, the Bankers Trust order has strict prerequisites. Evidence as to the guilt of the defendant whose assets the third party holds must be very strong. It must further be shown that the third party respondent holds or has held property belonging to the claimant, for example, funds belonging to them that have been misapplied by the defendant and ultimately ended up in the third party s hands. 27 Ashworth Hospital Authority v MGN Limited [2002] 1 WLR Patel v UNITE the Union [2012] EWHC 92 (QB) 29 Totalise plc v Motley Fool Ltd and another [2001] EWCA Civ 1897; R. (on application of Omar) v Secretary of state for Foreign and Commonwealth Affairs [2013] EWCA Civ [2002] 1 WLR Harrington v Polytechnic of North London [1984] 1 WLR Justice and Security Act 2013, Part 2, s Smith-Kline and French Laboratories Ltd v R.D. Harbottle (Mercantile) Ltd [1980] RPC Omar v Omar [1995] 1 WLR Smith-Kline and French Laboratories Ltd v Global Pharmaceutics Ltd [1986] RPC Bankers Trust Ltd. v Shapira [1980] 1 WLR 1274 CA 7

8 Moreover, the courts have shown themselves willing to consider seriously any potential inconvenience caused to the third party in complying, including adverse costs in gathering the information or any potential breach of the respondent s duty of confidentiality (although the courts have recognised that confidentiality can be broken where fraud is prima facie present). Consequently, the Bankers Trust order is not easy to obtain and, invariably, is granted only if the applicant agrees to a cross-undertaking to indemnify the third party respondent for reasonably incurred disbursements. (iii) Search and Seizure Orders / Anton Piller Orders Search and Seizure orders require a respondent to allow the applicant's solicitors to enter into the respondent s premises and search for, copy, remove and detain documents, information or other material covered by the order. The order may include documents, computer records and files. These Search and Seizure orders were formerly known as Anton Piller orders named after the case in which it was first decided by the Court of Appeal. 37 Its most common purpose is to preserve evidence, generally documentary evidence (in hard or soft copy) which is relevant to the proceeding. The High Court's power to grant such Search and Seizure orders is derived from section 7(1) of the Civil Procedure Act 1997 with procedural requirements set out in the CPR. A claimant may seek a Search and Seizure order where he believes that an order for the production of documents would not be sufficient because the defendant would destroy the requested documents. Such an order is very drastic in multiple ways. If, on the one hand, the defendant fails to comply with the order, he may be held in contempt of court. On the other hand, if the search order is set aside, the claimant may be ordered to pay damages to the respondent. Search and Seizure orders are mainly granted in intellectual property claims and most of them are made before the issue of a claim but after filing an acknowledgement of service. 38 Case law and the CPR have established various safeguards for defendants. For example, the search order claimant has a duty to make full and frank disclosure and provide an undertaking in damages. An independent solicitor must be appointed to supervise and report on the execution of the search. The requirements for the application for a Search and Seizure Order to be successful are: 1) A strong prima facie case needs to be established against the respondent; 2) The possible damage for the claimant must be a substantial one; and 3) The claimant must obtain clear evidence that the respondent has such documents in his possession and that it is more likely than not that the respondent will destroy such documents. A slightly less draconian remedy is offered by so called Doorstep Piller orders 39. These orders require the respondent to provide the material to the claimant s representatives. On service of the order, the respondent must immediately hand the material over, but he is not required to permit access to the premises. D. CONCLUSION The English Court will assist the parties in US proceedings to obtain documentary and oral evidence for use in those US proceedings, based on the principles in the Hague Convention, to which the UK is 37 Anton Piller KG v Manufacturing Processes Ltd [1976] Ch See esp. CPR 25.2(2)(c) 39 First applied in Universal City Studios Inc v Mukhtar & Sons Ltd [1976] FSR 252 8

9 a party. However, the English Court is required by the Evidence Act to take a far more restrictive approach than is common in the US. Wide-ranging US requests or fishing expeditions will not be granted in England. In practice, US attorneys would be well advised to liaise with English lawyers and obtain their advice before discovery orders and letters of request are issued by the US Court, so as to ensure as far as possible that they will be given effect in England. It is especially important to consider specifying the particular documents that are sought and the justification for requesting them. 9