Disclosure obligations – laying your cards on the table but protecting your hand

24 / 07 / 2013

Once litigation has commenced, parties have an ongoing obligation (which continues until the conclusion of the litigation) to perform a reasonable search to provide the other side with a list of all documents under their control or which were previously under their control (for example lost documents) which may help or hinder any party’s case. The obligation is owed to the Court, not the other party, so failure to comply could, in the worst case, amount to a contempt of Court.  These “discovered” documents may then be inspected, unless subject to legal professional privilege. Parties are bound to disclose relevant internal documents including emails, memos, computer records, deleted documents, metadata (in some cases) and any recordings, not just paper documents.

There are also occasions on which businesses are obliged to disclose information prior to litigation commencing, for example pursuant to a pre action protocol or if an employee makes a data subject access request under the Data Protection Act 1998 (‘DPA’); such requests being notoriously expensive and time consuming to deal with.

Disclosure during litigation

All too often, when defending tribunal proceedings, lawyers are presented with that “smoking gun” email that makes their heart sink: “here is a list of the people we need to get out of the business in the next six months” or “Abigail is probably the best candidate, but I don’t want to promote her because she may well have kids soon”; disclosure of such harmful material is likely to mean “game over”. To avoid being put in such a situation, managers must be made aware that they may be required to disclose this type of correspondence if a matter becomes contentious and should be trained to think about the implications of creating documents (including electronic documents).

The easy, if somewhat impractical, solution is to avoid generating correspondence of this nature in the first place:

• Discuss, don’t document: only essential new documents should be created. An oral discussion is not a document – but remember, such a conversation may still form part of any oral evidence given under oath.
• Record opinions with reasons: this avoids the true meaning being misconstrued later.
• Create a pro-forma minute for meetings: create a pro-forma minute for general purpose records marked ‘Private and Confidential’ if a record of discussions is necessary.

Where a business has tricky issues that need addressing, for example a wish-list of employees to exit from the business, then lawyers or in-house counsel should be engaged so that such correspondence can be made in the context of seeking legal advice and so be subject to legal advice privilege, the business’s trump card, and a way of protecting your hand. However, be careful not to inadvertently waive privilege by referring to privileged information in an ‘open’ document.

What about once proceedings have been commenced?

Litigation privilege protects confidential communications by clients or solicitors to a third party from the point that litigation is in contemplation, provided such communications are for the dominant purpose of the litigation. Requests for legal advice, communications with third parties to obtain evidence and internal communications related to legal advice are all protected – note, however, that where an organisation instructs its lawyers, the “client” for the purposes of asserting legal advice privilege will not be the whole organisation, rather only those tasked with obtaining and receiving the legal advice; documents generated by others will not be privileged. Additionally, internal communications not specifically related to legal advice will still be discloseable after litigation has commenced, meaning that internal documents relating to the merits of the litigation must be created with care or better still avoided. Businesses need to remember that the obligation to disclose is ongoing and does not cease just because litigation has commenced and must also be aware that if documents are destroyed once disclosure obligations have arisen, there may be serious consequences.

Damaging contemporaneous documentation may be inevitable, but why create an Achilles heel once litigation is in contemplation? Some further tips for protecting your hand:

• Fact-finding: instruct a lawyer to carry this out, and weave legal advice through the report. Legal advice attracts litigation privilege.
• Marking an internal document ‘confidential’, does not itself protect it from disclosure. Mark all related material ‘privileged and confidential – for litigation purposes’ as soon as litigation is in contemplation and this will help, although such documents will not attract privilege by default.
• Work on a ‘need to know’ basis: if you circulate a document, more are likely to be generated as those copied in make their own comments and express their own opinions. These will not attract litigation privilege.

Data Subject Access Request

Applications under the DPA may be made as a method of getting early disclosure, or if a potential claimant wants to assess the strength of their case. There is no requirement to justify the request and an employer cannot refuse a request on the grounds that it is onerous, but do not just throw in your cards:

• If the employee has previously made a similar request, there is only an obligation to respond if there has been a change in circumstances.
• The search must be reasonable and proportionate. Keep records of the steps taken to defend against claims that the search was not adequate.
• If the request is broad and generalised, seek clarification on the ambit of the request – this could be key in avoiding ‘fishing expeditions’ by employees.
• After collating data, consider if any is exempt from disclosure, and provide an appropriate explanation for the exemption.
• Make the process as difficult for the employee as possible by insisting on the £10 fee employers are entitled to charge and the evidence required to confirm the identity of the individual.

In every case it is vital to think of the consequences before you commit “pen to paper”, share your thoughts in an email or add your own ideas to a memo: you never know when your actions might come back to haunt you. A tough discipline, but always assume that whatever you record, by whatever medium, will be discloseable to a court, tribunal and/or a regulatory authority (eg: HMRC); if you wish “the house to win” have a document management program that gives you the “house advantage”. Follow the old adage: “If you fail to plan, you plan to fail”.