This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
The case of PHD Modular Access Services Ltd v Seele GmbH, heard by Mr Justice Akenhead in the TCC, provides clarification of the extent to which it is necessary to show that court proceedings are contemplated or likely when making applications for pre-action disclosure under CPR Part 13.16.
CPR Part 31.16 allows a court to make an order for disclosure before proceedings have started where both the respondent and applicant are likely to be a party to the subsequent proceedings. PHD Modular Access Services Ltd (“PHD“), a scaffolding sub-sub-contractor, made an application pursuant to this provision for disclosure of documents relating to the issues of instructions, time and money arising from the contract between Seele GmbH (“Seele“) as sub-contractor and Vinci Construction UK (“Vinci”) as main contractor in connection with the redevelopment of King’s Cross station.
On an analysis of the facts in the application, Akenhead J formed the view that there must be “more than the faint possibility that proceedings will happen” for CPR Part 31.16 to bite. On the basis that the parties had been through seven adjudications, each started by PHD, it did not appear likely that court proceedings were necessarily contemplated or “anticipated”, particularly as each of the adjudications concluded as at the date of the application had been decided in favour of PHD and had not been challenged by Seele.
In this context, Akenhead J held that there “must be a real prospect, if not a certainty or likelihood, that there will be proceedings between the parties” for the court to grant an order for pre-action disclosure under CPR Part 31.1.6.
Whilst Akenhead J ultimately dismissed this application, he helpfully addressed the breadth of disclosure sought by the applicant. He considered the form of the order requested and the categories of disclosable documents to be “impossibly wide” and suggested that any future order that may be granted prior to court proceedings between the parties would substantially limit the extent of disclosure. The learned judge considered the order seeking disclosure of the following to be too wide: all instructions and variations from Vinci to Seele; all applications for extension of time made by Seele to Vinci; and all correspondence from any party in relation to extensions of time made by Seele to Vinci.
This case provides useful guidance on the High Court’s approach to pre-action disclosure and highlights its unwillingness to interfere prematurely in parties’ contractual relationships, particularly where the parties appear to have already engaged successfully with alternative dispute resolution methods.
Notably, Akenhead J advised that parties contemplating, or in the process of, adjudication should not “see CPR Part 31.16 as some sort of procedural support and a tactical weapon for the purposes of adjudication”. Indeed, whilst pre-action disclosure can be a useful cost-saving tool where court proceedings are a real prospect for both parties, this case may serve to deter future pre-action disclosure orders sought as a fishing expedition.
As highlighted in our analysis of 2006 case Birse Construction-v-HLC Engenharia Gestäo de Projectos, the TCC has been reluctant to order pre-action disclosure except in exceptional circumstances, with particular emphasis resting on the need to satisfy the final limb of the test set out in CPR 31.16.3 (“the desirability test”). In Birse, Mr Justice Jackson considered that a pre-action disclosure order would not necessarily be appropriate where there is a “level of cooperation between opposing parties” and this appears to have also been a factor in Akenhead J’s reluctance to order pre-action disclosure where the parties were in the throes of successful adjudication applications.
