Barness & Ors v Formation Group & Ors

An order under CPR Part 18 may be made only in relation to a matter currently in dispute. It cannot be used to discover possible additional defendants or formulate possible future claims. Information sought before service of particulars must be reasonably necessary and proportionate to enable the claimant to prepare the pleading required at that stage. It is not enough that earlier information might produce a fuller or better case. Although the court has broad case-management and disclosure powers, the orthodox course is ordinarily to require the claimant to plead its case on the available material, allow the issues to be defined, and address disclosure thereafter.

The claimants sought orders under CPR Part 18 requiring Scion Financial Partners Ltd and Scion Ltd to provide extensive information about investment schemes, information memoranda, their preparation, and alleged misrepresentations. The proceedings were at an early stage and particulars of claim had not yet been served.

The information was said to be needed to improve the pleading, identify possible further defendants, and support allegations of fraud. The central issue was whether the requested information was information about a matter currently in dispute and was reasonably necessary and proportionate to enable the claimants to prepare their case.

1. The application was dismissed. The claimants had not established that the requested information was reasonably necessary to enable them to serve their particulars of claim, as required by paragraph 1.2 of Practice Direction 18.
2. Under CPR rule 18.1, the court must identify the matter currently in dispute at the time of the application. Possible future claims and the possible identification of additional defendants are not current matters in dispute and cannot justify an order under Part 18.
3. The requirement that information be reasonably necessary and proportionate to enable a party to prepare its own case was applied to the procedural stage actually reached. The court was concerned with what was needed to serve the particulars of claim, not with information that might later assist witness evidence, expert evidence, trial preparation, or other future stages.
4. The fact that further information might improve the pleading did not establish necessity or proportionality. The claimants were able to serve their draft pleading, signed by counsel, on the material already available.
5. The court acknowledged possible powers under CPR rule 3.1(2)(m) and rule 31.12, including in relation to verification notes. However, ordering disclosure or equivalent information before service of the pleading was unusual, particularly where fraud was alleged. The orthodox and appropriate course was to require the claimants to plead their allegations, allow them to be defended, provide disclosure in the ordinary sequence, and then reassess the issues.