Ixis Corporate & Investment Bank (Formerly CDC Ixis Capital Markets) v Westlb AG & Ors

Third-party disclosure under Civil Procedure Rules 1998 Part 31.17 requires evidence that the specified documents or classes are likely to exist, are likely to support the applicant’s case or adversely affect another party’s case, and are necessary for the fair disposal of the claim or to save costs. For a class of documents, the court must be satisfied that the class, considered individually and in context, meets the threshold, although it is immaterial that some documents later prove unhelpful. The court must also balance disclosure against privacy, confidentiality and proportionality. Appropriate redaction and payment of the third party’s reasonable costs may address those concerns.

IXIS brought substantial claims in deceit and negligence against WestLB AG, CIBC World Markets PLC and Terra Firma Capital Partners Ltd concerning defects in a financial model used in the Box Clever securitisation. IXIS applied under Supreme Court Act 1981 section 34 and Civil Procedure Rules 1998 Part 31.17 for disclosure by Calyon, London Branch, a non-party and successor to Crédit Agricole Indosuez.

The application concerned documents relating to analyses of the model’s 40% change-of-model termination assumption, communications with Nomura and WestLB, and material prepared for CAI’s Credit Department. The central questions were whether the documents or classes were likely to exist, whether they might assist IXIS or prejudice WestLB or Terra Firma, and whether disclosure was necessary for the fair disposal of the claim.

1. Jurisdiction and threshold. The court had jurisdiction under Supreme Court Act 1981 section 34 only if Calyon was likely to have relevant documents in its possession, custody or power and the requirements of Civil Procedure Rules 1998 Part 31.17 were met. The evidence and draft order had to identify the individual documents or classes sought.
2. Under Part 31.17(3)(a), “likely to support” or “adversely affect” means that disclosure may well have that effect. The court must also be satisfied that the relevant document or class is likely to exist. Where a class is sought, the court must consider whether the documents within it, viewed individually and as members of the class, meet that threshold. It is immaterial that some documents later prove unhelpful.
3. The court accepted the guidance in O’Sullivan v Herdmans Ltd [1987] 1 WLR 1047 that the disclosure power is exercised to advance the proper administration of justice. The court may refuse an order where it is unnecessary, oppressive, contrary to the interests of justice or contrary to the public interest.
4. On the evidence, three classes of documents were likely to exist in Calyon’s control and might well assist IXIS or adversely affect WestLB or Terra Firma: communications between CAI personnel and Nomura personnel; internal CAI communications within the Deal Team; and documents prepared for or by the Credit Department concerning CAI’s possible participation in the securitisation. Communications directly with WestLB were not sufficiently established, and direct communications with Terra Firma were not relevant for the stated period.
5. Disclosure of the three classes was necessary for the fair disposal of IXIS’s claim. Privacy and confidentiality concerns concerning CAI’s commercial strategy and internal credit processes could be addressed by appropriate redaction. IXIS was required to pay Calyon’s reasonable costs, and the order was to be framed substantially in the form proposed, covering documents from 20 January to 22 February 2002.