Agency Litigation: The Dos and Don’ts of Disclosure

February 27, 2013

What is disclosure?

Disclosure is the stage in litigation at which each party is required to disclose to the other party all documents in its possession or control, which are relevant to the case.

If you get caught up in litigation with your agent or your principal, you must therefore disclose those documents that are in existence and which you can find as well as those documents that are held by third parties, but which you can require the third party to return to you.

Disclosure is by way of a list identifying each document, following which the other side has a right to inspect the documents listed (subject to various exceptions).

It is important to remember that you do not need to disclose every document you have which refers to the agency relationship.  But you must disclose any which are relevant to the case.

What is relevant?

You need to disclose the following:

  1. The documents on which you rely; and
  2. The documents which:
    a.    adversely affect your own case;
    b.    adversely affect another party’s case; or
    c.    support another party’s case.

This means that you will have to disclose any documents that are unhelpful to your case.

What is a “document”?

“Document” has a wide meaning.  A “document” is defined as anything in which information of any description is recorded.

To comply with the duty you must undertake a reasonable search for documents which are in your possession or under your control.  It is important that you do not destroy any documents that you recover as a result of your search, even if they appear to be unimportant.

Emails and internal memos are often fired off in the heat of the moment with no thought given as to whether the document will come back to bite the sender. In an ideal world one would always consider whether a document is likely to be used in litigation before creating it.  In practice, this rarely happens!  In order to minimise the risk of such emails or memos coming back to bite you, you should always consider carefully whether you should commit your private thoughts to paper.

What does not need to be disclosed?

The following types of documents need not be disclosed:

  1. Privileged documents
  2. “Without Prejudice” communications

The fact that a document is confidential does not mean that it does not need to be disclosed.  For example, principals often ask whether they have to disclose documents which contain price sensitive information.  In some circumstances, you can cover up confidential parts of documents, where they are not relevant to the claims made or where disclosing the document might breach duties of confidentiality owed to another person.

What if a document is both relevant and privileged – should I disclose it?

Some documents may be helpful to your case, but also contain information which is privileged.  Whilst it is possible to disclose only the part of the document on which you wish to rely and cover up the part which is privileged, caution should always be exercised before doing so.  This is because you may be accused of “cherrypicking” parts of documents which are favourable to you, while retaining privilege for those which are unfavourable.

Further, in the event that you decide to disclose only part of a document, you should be certain that only that part, rather than the whole, of the document is privileged.  If you disclose part of a document which is privileged in whole, the disclosure of part could be taken as a waiver of privilege in respect of the whole document.  Worse still, it could be taken as a waiver of privilege in respect of documents relating to the same subject matter.  For obvious reasons, you would not want to be a position where you are forced to disclose other privileged documents.

What about documents that turn up later?

The obligation to disclose relevant documents continues throughout the course of the proceedings.  If relevant documents come to your attention after you have given your list of documents to the other side, you should notify the other side promptly.

This continuing duty also applies to documents created after you have submitted your list, and continues until judgment or settlement.  It is therefore also important to try to avoid creating any new non-privileged documents which, if disclosed, could harm your case.

Consequences of failing to comply with disclosure obligations

If you are faced with an inadequate list from the other side, you might wish to apply to the Court for specific disclosure.  If the Court believes that relevant documents have been withheld, it will usually make an order.  Such order is likely to take the form of an “unless” order meaning that, unless the order is complied with by a certain date, the Claim or Defence will be struck out without further consideration of the proceedings.

Alternatively, and far less serious a sanction, if a party continues to fail to comply with its disclosure obligations, the Court may prevent that party from relying on it.

Conclusion

Disclosure is a complex process.  As a general rule, if you are uncertain as to whether a document is relevant or not, or whether a document is or may be privileged, obtain advice before disclosing it to the other side.


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