Pre-action disclosure

Pre-action disclosure
 
We recently acted for the successful applicant in an application for pre-action disclosure in the High Court; this is a relatively rare type of application, but when used cleverly can be key to unlocking resolution for a client.
 
 
Background
 
Our client (C) bought a house which had previously been subjected to renovation work by the vendors, including a lift conversion. The Defendant (D) was an Approved Inspection who had issued a Final Certificate confirming that the work complied with Building Regulations. However, shortly after moving in, it became apparent that the work was defective, with surveyor noting 18 potential breaches of Building Regulations, including the fact that a steel beam had not been installed.

The parties engaged in correspondence, including requests for D’s documents related to the property and their work. D refused to provide the same, and so C issued an application for pre-action disclosure.

The law

The procedure for pre-action disclosure is detailed at CPR 31.16, with the court’s powers coming from section 33(2) of the Senior Courts Act 1981 or section 52(2) of the County Court Act 1984.
In short, the court may only make an order (and it is a ‘may’ – the order is entirely discretionary) where:

• The parties are likely to be parties to subsequent proceedings;
• If proceedings had started, the Respondent’s duty by way of standard disclosure would extend to the documents or classes of documents of which the applicant seeks disclosure; and
• Pre-action disclosure is desirable in order to –
  1. dispose fairly of the anticipated proceedings;
  2. assist the dispute to be resolved without proceedings; or
  3. save costs

What this means in practice is that:

• You do not have to show that proceedings will be issued, only that the parties to the application are likely to be the parties to any proceedings (Black v Sumitomo [2001] EWCA Civ 1819) – and an application for pre-action disclosure cannot be made after proceedings have been issued (Personal Management Solutions Ltd v Gee 7 Group Ltd [2015] EWHC 3859 (Ch));
• In order to determine whether the documents requested would form part of the Respondent’s standard disclosure obligations (detailed at CPR 31.6), the issues that form the basis of the proposed claimant’s case must be set out with sufficient clarity.
• The desirability test is a two-stage process (a jurisdictional threshold as well as a discretionary threshold) and should be interpreted as something “to be wished for as reasonably necessary or at least useful” (Pineway Ltd v London Mining Company Ltd [2010] EWHC 1143 (Comm))
• The documents requested should be required to fill missing gaps and to shed light on key matters (Total E&P Soudan SA v Edmonds [2007] EWCA Civ 50)
• Costs can be saved if the pre-action disclosure means that a statement of case does not need to be amended to take account of disclosure (First Gulf Bank v Wachovia Bank National Association [2005] EWHC 2827 (Comm)).

The general rule if an application for pre-action disclosure is successful is that the Applicant will have to pay the Respondent’s reasonable costs of undertaking the document search, as well as the costs of the application itself, although the court may make a different award depending on the circumstances of the case (CPR 46.1).

The outcome

Our client’s application for the documents was successful, and the Judge made an order that each side bear their costs of the Application, with our client only being required to pay the reasonable costs of undertaking the document search. This was a fantastic outcome for the client, and it is hoped that the documents to be provided (within 21 days of the hearing) will be enough to allow us to finalise our client’s claim and issue it at court if settlement cannot be reached.