Cadogan Petroleum Plc & Ors v Tolley & Ors

Confidentiality is not, by itself, a sufficient reason to resist disclosure. The governing question is whether disclosure is necessary for the fair disposal of the proceedings. Where relevant material is held by a non-party, the court must give particular weight to that party’s confidentiality, but fairness at trial remains the paramount consideration. Disclosure should be confined to the parts of a document necessary to enable a party to conduct its case fairly. Appropriate safeguards, including restricted inspection and continuing confidentiality arrangements, should be used where practicable. An agreement cannot validly prevent the court from ordering disclosure necessary for a fair and just trial.

The claimants brought proceedings concerning the sale of gas processing plants, alleging overpricing, bribery, dishonest assistance, breach of fiduciary duty and conspiracy. Several defendants settled with the claimants, and the action was dismissed against them. The settlement agreement contained confidentiality provisions.

The first, second, fourth and fifth defendants applied under CPR 31.12 for disclosure and inspection of the settlement agreement. The claimants did not oppose disclosure, but the former GPS defendants resisted inspection of material which they considered confidential and irrelevant. The issue was whether, and to what extent, the settlement agreement should be disclosed to enable the remaining defendants to conduct their defences fairly.

1. Applications granted in principle. The applicants were entitled to disclosure of those parts of the settlement agreement necessary for a fair and just disposal of the trial. The court did not order disclosure or unlimited inspection of the agreement as a whole.

2. The applicable test, restated in Canadian Imperial Bank of Commerce v Beck [2009] EWCA Civ 619, was whether disclosure was necessary for fairly disposing of the proceedings. Relevance was a factor but was insufficient on its own.

3. Confidentiality was not an absolute bar to disclosure. The principle in Science Research Council v Nasse [1980] AC 1028 recognised that confidentiality could be relevant, particularly where disclosure was sought from a non-party under CPR 31.17. Nevertheless, the court had to ensure that every party had a fair opportunity to dispose of the proceedings. A serious risk of an unfair trial outweighed confidentiality, subject to suitable protective measures.

4. The former GPS defendants’ unilateral assessment of which provisions were relevant was not determinative. A mechanism had to be devised to identify the disclosable provisions while protecting genuinely confidential material. Possible safeguards included controlled inspection, separate counsel reviewing the document, and restrictions on subsequent use and deployment at trial. The procedure described in The Attorney General of Zambia v Meer Care & Desai & Ors [2007] EWHC 952 and Atos Consulting Ltd v Avis PLC 2 [2007] EWHC 323 provided useful guidance.

5. The judge declined to accept the general proposition apparently derived from Healds Foods Ltd v Hyde Dairies Ltd that an agreement restricting an expert’s evidence could prevent disclosure necessary for a fair trial. Any contractual term purporting to restrict the court’s discretionary power to order such disclosure would be void as contrary to public policy.

6. The settlement agreement was to be placed in the second part of the disclosure list. Inspection was deferred pending agreement between the parties or further determination by the court of the protective mechanism.