ACL Netherlands BV & Ors v Lynch & Anor

Permission to make collateral use of documents disclosed and witness statements served in English proceedings is exceptional. The applicant bears the burden of showing special circumstances and cogent and persuasive reasons, and must also show that release will not cause injustice to the person who disclosed the material. Those requirements are cumulative. A foreign criminal subpoena and the public interest in investigating serious fraud may be important, but compulsion does not automatically prevail. The court must examine necessity, urgency, scope, judicial involvement and prejudice in both jurisdictions. Witness statements before trial attract particular protection because they are not yet evidence or public documents and may reveal the defence case. Where an imminent trial, broad request and uncertain necessity leave those requirements unmet, permission should be refused.

The first, second and fourth claimants sought permission under the Civil Procedure Rules 1998, specifically CPR 31.22 and CPR 32.12, to provide the FBI with documents disclosed and witness statements served in the English proceedings. The request was made in response to a Grand Jury subpoena addressed to the claimants' parent company in the United States.

The first defendant opposed the application, arguing that the claimants had not shown cogent and persuasive reasons or that release would avoid injustice. The second defendant left the decision to the court. The central issue was whether asserted United States compulsion and the public interest in investigating alleged serious fraud outweighed the policy protecting collateral use restrictions, particularly shortly before the English trial.

Application dismissed.

1. The Civil Procedure Rules 1998 impose important restrictions on collateral use. CPR 31.22 governs disclosed documents and CPR 32.12 governs witness statements. The word use is broad and includes showing the material to others, using information derived from it, and referring to its characteristics or provenance, as explained in Tchenguiz v Grant Thornton UK LLP [2017] 1 WLR 2809 and IG Index plc v Cloete [2015] ICR 254.
2. Following Crest Homes Plc v Marks [1987] AC 829, the applicant must establish special circumstances amounting to cogent and persuasive reasons for release and must satisfy the court that release will not occasion injustice to the person giving disclosure. The burden is particularly heavy where the request benefits a non-party, as noted in Bibby Bulk Carriers v Consulex Ltd [1989] QB 155. The two limbs are cumulative, and the court must weigh all relevant circumstances and public interests.
3. Witness statements before trial require a more restrictive approach. Under CPR 32.5, a statement is not evidence until the witness is called, and CPR 32.13 reflects the different position once it stands as evidence at a public trial. The reasoning in Blue v Ashley [2017] EWHC 1553 (Comm), Hollywood Realisations Trust v Lexington Insurance Co [2003] EWHC 996 (Comm) and Prudential Assurance v Fountain Page [1991] 1 WLR 756 supported particular caution where release might prejudice the serving party or disrupt an imminent trial.
4. The public interest in investigating serious fraud, including in a transnational context, can be a powerful consideration. However, Marlwood Commercial Inc v Kozeny and others [2005] 1 WLR 104 and Bank of Crete SA v Koskotas (No 2) [1992] 1 WLR 919 did not establish that foreign compulsion automatically overrides the English restrictions. The court must examine actual necessity, urgency, scope, judicial involvement and possible injustice. The approach in Attorney-General for Gibraltar v May and others [1999] 1 WLR 1000 confirmed that competing public interests and prejudice must be considered together.
5. The claimants failed to show that they were themselves clearly compelled, that the documents were within the relevant legal control, or that the broad request was necessary for the United States process. The subpoena appeared to have received no material judicial input and was not tied to any identified issue or investigation. Release of witness statements could give the prosecution tactical insight into the defence and could distract from or unsettle the imminent English trial. The application therefore failed on both limbs of the applicable test.

High Court (Chancery Division): interlocutory application issued on 26 November 2018, heard on 23–24 January 2019, and dismissed by Mr Justice Hildyard.