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A clear reminder to undertake proper e-disclosure in disputes

It can sometimes appear that it is too easy for lawyers to throw legal cases at you and use them to justify what can seem like extra admin and bureaucracy. In the case ofEarles v Barclays Bank Plc ([2009] EWHC 2500), however, the judgment (handed down in 2009) raises an issue not to be overlooked. Litigants must undertake proper e-disclosure of documents, or face potential cost consequences.

So, what is e-disclosure?

E-disclosure is the obligation where you have to tell the other parties in the dispute what electronic documents you hold that are relevant to the dispute. All documents must be disclosed even if they undermine or weaken your case. The scope of what constitutes a ‘document’ is very wide and even includes deleted emails.

Background to this case

The key issue in the claim related to whether instructions to transfer money had been given to a bank by a customer who now claimed the transfers were unauthorised. In the judge’s view, neither party had given full disclosure of all relevant documents regarding this key issue.

Furthermore, neither party had taken any steps to preserve potentially relevant phone or e-mail records during the time before the case went to court. It had become clear that these documents were likely to be crucial to deciding the case. The defendant bank had also chosen not to search for certain electronic documents which were of importance, in the belief that they were of marginal relevance and that it would be disproportionately expensive to search for them.

The judge was highly critical of the parties and therefore considered whether to ‘read anything into’ this behaviour and also to impose cost sanctions as a penalty.

The judge concluded that although there was no duty to preserve documents prior to litigation, in some circumstances it might be right to draw adverse inferences on the basis of a party’s conduct prior to proceedings starting. On this occasion, the judge did not chose not to draw any inference in relation to the failure to give proper disclosure or to preserve documents as he did not believe there had been a deliberate attempt to get a tactical evidential advantage. Rather, the bank had simply failed to comply with its disclosure obligations.

The judge emphasised that disclosure of key documents is essential for the court to achieve accurate and efficient fact finding. He found that the bank’s conduct of disclosure fell far below that which is to be expected of those practising in the civil courts. The judge added that if there had been proper disclosure then it was likely that the matter would not have proceeded to trial. Therefore, although the bank was successful and was awarded its costs, the judge reduced the costs award to 50% for failure to take protective pre-action steps.

So, why is this important for you?

What this judgment illustrates is the penalty you may face for not disclosing the proper documents, if they are relevant to the case being disputed. Importantly, this does not just apply to paper documents but to all electronic documents. If you are considering litigation you must discuss the disclosure process with a qualified solicitor and ensure that you fully understand the level of supporting documentation that you may be called upon to provide.

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