Kneale v Barclays Bank Plc (t/a Barclaycard)

Pre-action disclosure under CPR 31.16 requires separate consideration of jurisdiction and discretion. The applicant must show more than a speculative possibility of a claim, although the jurisdictional threshold is lower than the real prospect of success test applicable to summary judgment. The applicant must also show that the parties may well become parties to proceedings and that disclosure is desirable for one of the purposes in CPR 31.16(3)(d). Even where jurisdiction exists, an order is exceptional and normally inappropriate where the proposed claim is speculative or the documents are not necessary to formulate it. A focused request does not justify disclosure where necessity is unproved. The ordinary costs rule for pre-action disclosure remains that the respondent receives its costs, unless its opposition or conduct is clearly unreasonable.

Barclays appealed against an order of HH Judge Halbert in the Chester County Court requiring pre-action disclosure of the applicant’s original executed Barclaycard agreement. The applicant sought the document after receiving reconstituted contractual materials under section 78 of the Consumer Credit Act 1974. He had not stated whether he disputed signing an agreement, whether the supplied terms were inaccurate, or what positive case he advanced on enforceability.

The appeal concerned whether the requirements of CPR 31.16(3) were satisfied, whether disclosure should be ordered in the court’s discretion, and whether Barclays should pay all the costs of the application.

1. Appeal allowed. The order for pre-action disclosure and the order requiring Barclays to pay the applicant’s costs were discharged.
2. CPR 31.16 creates distinct jurisdictional and discretionary stages. The court may make an order only if the conditions in CPR 31.16(3) are satisfied, but satisfaction of those conditions does not require an order. The discretion must be considered separately and in detail: Black v Sumitomo [2002] 1 WLR 1562.
3. The applicant need not establish that proceedings are more likely than not to be issued. It is sufficient that the parties may well become parties to subsequent proceedings. However, the applicant must show a prima facie case which is more than a merely speculative punt. The lower threshold identified in Black v Sumitomo and BSW Limited v Balltec Limited [2006] EWHC 822 (Ch) was preferred to the formulation in Rose v Lynx Express [2004] EWCA Civ 447, which equated the threshold with a properly arguable case having a real prospect of success.
4. The applicant failed to satisfy the jurisdictional requirements. He had produced no evidence suggesting that the agreement was unenforceable, had not explained his position on signing it, and had not shown that the original document was necessary. The materials supplied under section 78 were capable of enabling an arguable case under section 61 to be formulated. The application was therefore wholly speculative and disclosure was not desirable under CPR 31.16(3)(d).
5. Even if jurisdiction had existed, discretion would have been refused. Pre-action disclosure is not appropriate in every case, but normally only where some feature takes the case outside the ordinary run. The judge below had erred in principle by treating discretion as a repetition of the jurisdictional decision, overlooking the speculative nature of the application and treating the alleged necessity of the original agreement as established.
6. The ordinary costs rule under CPR 48.1 is that the respondent receives its costs. Departure requires clear unreasonableness in opposing the application or in the manner of opposition. Barclays had opposed the application on a point of principle, and the judge had identified no sufficient unreasonable conduct. The applicant was ordered to pay Barclays’ costs below and on appeal.

• High Court (Commercial Court): allowed Barclays’ appeal from the Chester County Court; discharged the pre-action disclosure order and the costs order.
• Chester County Court: HH Judge Halbert ordered pre-action disclosure and ordered Barclays to pay the applicant’s costs.