This decision is important for three reasons.
Firstly, the Court confirmed that it was a prerequisite to the disclosure regime under both CPR 31 and the Disclosure Pilot Scheme that, for a document to be disclosable, it must be within the control (or, at least, previously within the control) of a party to the dispute. Though the term "control" is infrequently used in the text of Practice Direction 51U, the Court considered that a party's disclosure obligations would be "uncontrollably wide" if a party were required to disclose documents that were outside of its control (not to mention the additional costs burden associated with such a requirement). This decision demonstrates that the concept of "control" is of foundational importance to the disclosure regime under the CPRs, irrespective of whether that disclosure is ordered to be made under CPR 31 or the Disclosure Pilot Scheme; with the newer Disclosure Pilot Scheme providing for continuity rather than change in this regard.
Secondly, the Court confirmed that concept of control (under English law, at least), is quite broad in nature. A party controls a document not only where it possesses (or has previously possessed) the document but also where it has (or has previously had) a "right" to possess or inspect a document in the possession of a third party. The Court has previously interpreted the term "right" broadly, to encompass both legal rights to possession/inspection of documents and "practical arrangements " between a party to a dispute and a third party, where the third party in fact allows for the party to access the documents in some way. Further, the Court confirmed that English law presumes (in the absence of evidence to the contrary) that corporate employers control the documents produced by their employees and ex-employees where such documents relate to the employees' work.
It is therefore possible that, had the relevant law for determining whether the documents were in the control of Saudia been English law, the Court would have ordered for the disclosure to be made. Indeed, it was common ground in the Phones 4U case that the work-related documents held on the personal mobile phones of senior personnel were within their corporate employer's control, and accordingly the Court ordered the defendant to request its senior personnel to produce their mobile phones to an independent IT consultant to extract documents relevant to the underlying claim.
Thirdly, the Court concluded that, in the absence of an express power to do so, it did not have jurisdiction to make a Best Endeavours Order in circumstances where Saudia did not control the documents in question. This reflects the fact that, although the Court has a broad discretion under both CPR 31 and the Disclosure Pilot Scheme to make disclosure orders that the Court considers appropriate, there are important limitations to its powers.
In circumstances where a party does not control relevant documents that are in the possession of a third party, the best available route may therefore be an application for third party disclosure under CPR 31.17. However, it is likely that such an application would not have been successful in this case, given that both senior personnel were located outside of the United Kingdom and, although the Court did not dwell on this fact, one of the custodians was a Minister in a foreign government and his mobile phone may be considered to contain state secrets.
Please speak either to us, your usual contact at Travers Smith, or a member of the Dispute Resolution team, for more information.