Jay & Ors v Wilder Coe (a firm)

Pre-action disclosure may be ordered even though the proposed claim remains imperfectly particularised or somewhat speculative. The applicant need only show that each party may well be a party to later proceedings. The documents sought must fall within the respondent’s likely standard-disclosure obligation, and disclosure must be desirable to resolve the dispute, dispose fairly of anticipated proceedings or save costs. The court retains a broad discretion. A request is not necessarily impermissible merely because it may help identify the mechanism of the loss or clarify whether proceedings should be brought. Relevant considerations include the documents’ direct connection with the allegedly negligent professional work, the reality of the loss, and the burden of disclosure.

The applicants, former partners in a solicitors’ firm, suspected that a substantial client-account shortfall had arisen during periods when the respondent accountants prepared their statutory accountant’s reports. They alleged that negligent auditing had allowed further defalcations to occur.

They applied under CPR 31.16 for disclosure of the respondents’ files and working papers. The respondents argued that the applicants could not yet show that proceedings were likely, had given insufficient detail of the loss, and were pursuing a fishing expedition. The central issues were whether the conditions in CPR 31.16 were met and, if so, whether disclosure should be ordered in the exercise of the court’s discretion.

1. Application granted. The court ordered pre-action disclosure of the respondents’ files, working papers and related documents concerning the accountant’s reports for the relevant years.

2. Applying Black v Sumitomo Corporation [2002] 1 WLR 1562, “likely” in CPR 31.16(3)(a) and (b) means no more than that the parties may well be parties to subsequent proceedings. Those conditions can be satisfied where disclosure may show that proceedings cannot or should not be commenced. The applicant need not already possess every ingredient required for a complete pleading, provided there is a real prospect that disclosure would make a fair order appropriate if proceedings were brought.

3. The documents sought satisfied CPR 31.16(3)(c), since they would fall within standard disclosure if proceedings were commenced. CPR 31.16(3)(d) was also satisfied because disclosure might resolve the dispute without proceedings, save costs, or assist the fair disposal of anticipated proceedings.

4. The decisive issue was discretion. The working papers were directly connected with the professional work alleged to have been performed negligently and were analogous to the obvious examples of relevant medical records discussed in Black v Sumitomo Corporation. The loss was realised rather than merely speculative. Although the claim retained speculative features and could be characterised as a fishing expedition, that did not prevent an order where disclosure was needed to investigate the mechanism of an established misfortune. The likely modest volume of material also supported making the order.