National Westminster Bank Plc v Rabobank Nederland

Inspection of disclosed documents may be withheld where the disclosing party has a right or duty to withhold inspection, including a duty of confidentiality under Civil Procedure Rules 1998, r 31.3(1)(b). Documents must first be relevant to a pleaded issue. Even where relevance is established, the court must apply proportionality and may refuse inspection where the material adds no significant information or largely duplicates material already available. Confidentiality may therefore be maintained unless the applicant demonstrates both relevance and proportionality. Depositions based on irrelevant or non-inspectable documents will ordinarily be treated similarly. Expert work product is not relevant merely because it exists, although relevant settlement information may properly be inspected.

Price Waterhouse and Coopers & Lybrand UK and US applied for an order restraining Rabobank from permitting National Westminster Bank to inspect documents generated or disclosed in settled Californian proceedings. The disputed material comprised audit documents, witness depositions, an expert’s evidence and underlying documents, and a settlement agreement. The applicants relied on protective orders and contractual confidentiality obligations. The application arose in Rabobank’s counterclaim concerning alleged fiduciary breaches during the banks’ handling of the Yorkshire Food Group’s financial difficulties. The central issues were whether the documents were relevant to pleaded issues and, if so, whether confidentiality and proportionality justified withholding inspection.

1. The application succeeded, except that the amount of the Californian settlement was to be inspected. The court assumed that any issue concerning apportionment of the settlement could be dealt with satisfactorily.
2. Under Civil Procedure Rules 1998, r 31.6, standard disclosure is confined to documents on which a party relies, documents adversely affecting its own or another party’s case, and documents supporting another party’s case. Once such a document is disclosed, inspection follows under r 31.3, subject to the right or duty to withhold inspection under r 31.3(1)(b).
3. The audit documents were not relevant. Coopers & Lybrand’s knowledge was not alleged to be imputable to National Westminster Bank. The documents could therefore assist only if they demonstrated both a fiduciary breach and knowledge of it by National Westminster Bank. On the evidence, that was highly unlikely.
4. The court applied the proportionality principle identified in Simbatola v Trustees of the Elizabeth Fry Hostel and others. Inspection should not be ordered where the documents provide no additional or significant information beyond material already available, or largely duplicate it. Confidentiality could be overcome only where relevance and proportionality were both established.
5. The depositions were one stage removed from the underlying documents and were likewise not inspectable. Proportionality was particularly important. The expert’s own opinion was irrelevant, while any relevant underlying Yorkshire Food Group documents were already subject to disclosure.