Anglo Irish Bank Corporation Plc v West Lb Ag

Pre-action disclosure under CPR 31.16 is available only where the statutory conditions are satisfied and disclosure is desirable to dispose fairly of anticipated proceedings, assist settlement or save costs. The court’s discretion is broad, but it should be exercised cautiously where the proposed claim involves complex and unresolved issues of fact and law. A claim ordinarily need only be properly arguable and have a real prospect of success; the court should avoid determining substantive issues prematurely. Disclosure sought from one commercial party before proceedings, particularly internal documents relating to a financial transaction, may be refused where it would be burdensome, unilateral and unlikely to resolve the dispute. The jurisdiction should not be used to enable a prospective claimant to discover whether it has a case.

Anglo Irish Bank Corporation Plc sought pre-action disclosure from West LB AG under CPR 31.16. The intended claim concerned alleged oral representations about the likely early redemption of leveraged credit-linked notes and West LB’s alleged agreement to buy them back at par. Anglo Irish sought communications concerning the anticipated redemption and any potential repurchase.

The parties disputed the strength and speculative nature of the proposed negligent misrepresentation claim, the effect of contractual disclaimers, the burden of disclosure and whether disclosure would assist settlement or avoid costs. The central issue was whether the requirements of CPR 31.16(3)(d) were met.

1. Applicable approach. The first three conditions in CPR 31.16(3) were substantially satisfied. The decisive question was whether disclosure was desirable under CPR 31.16(3)(d) to dispose fairly of the anticipated proceedings, assist resolution without proceedings or save costs.
2. Merits of the intended claim. Following Rose v Lynx Express Ltd [2004] 1 BCLC 455, the court should normally avoid deciding substantive issues at the pre-action stage. It is ordinarily sufficient that the proposed claim is properly arguable and has a real prospect of success. This claim was not speculative in the extreme, but its evaluation would involve disputed questions concerning the statements made, their meaning, actionability, duty of care, reliance, inducement, falsity and the effect of the prospectus disclaimers. The court therefore declined to treat the claim’s alleged weakness as a factor against disclosure.
3. Discretion and practical considerations. The court directed itself by Black v Sumitomo Corp [2002] 1 WLR 1562. Relevant considerations included the nature of the loss, the clarity of the issues, the documents sought, pre-action inquiries and the applicant’s ability to present its case without disclosure. The proposed disclosure could be burdensome, would be imposed unilaterally before proceedings, and might produce further questions rather than resolve the dispute.
4. The principle identified in BSW Limited v Balltec Limited [2006] EWHC 822 (Ch) applied: pre-action disclosure should not be used to enable a prospective claimant to discover whether it has a case. Although the application was not characterised as a fishing expedition, the same underlying concern was engaged. Internal disclosure of this kind between well-resourced financial institutions should be rare.
5. The requirements of CPR 31.16(3)(d) were not established. The application was dismissed.

First-instance decision. No earlier appellate decision is stated in the judgment.