SL Claimants v Tesco Plc

Extended or specific disclosure must be justified by necessity for the fair resolution of a defined issue and must remain reasonable and proportionate. A court should resist broad, granular searches that are speculative, duplicative or likely to disrupt trial preparation.

Public reference to privileged material does not necessarily destroy confidentiality in the document itself. The court must distinguish information from the document and assess the extent and detail of the exposure, while balancing open justice against confidentiality and proportionality.

A letter of request may be issued under the court’s inherent jurisdiction where the documents exist, are readily identifiable and would be admissible evidence. Requests must be confined to particular documents rather than general discovery.

Two groups of investors brought claims against Tesco under section 90A and Schedule 10A of the Financial Services and Markets Act, alleging losses arising from reliance on misleading published information concerning Tesco’s profits.

The judgment determined applications at the fourth case management conference before the June 2020 trial. The applications concerned specific disclosure, privilege and confidentiality, amendments and strike-out, reliance evidence, letters of request to foreign courts, and the trial timetable.

The central issues were whether further disclosure was necessary and proportionate, whether references to a privileged interview note had destroyed confidentiality, whether proposed impairment allegations should proceed, and whether foreign-held investment models and analyses should be obtained.

1. Disclosure. Under CPR PD51U, extended disclosure must be necessary for the fair resolution of an identified issue and reasonable and proportionate having regard to the Overriding Objective. Existing disclosure, an agreed disclosure architecture and the imminence of trial were material. The court refused searches of junior employees’ documents, the Shared File Store and further unredacted accounting material where the requests were insufficiently focused, duplicative or disproportionate. A limited search concerning Tesco’s Republic of Ireland business was ordered where relevant material might exist.
2. Privilege and confidentiality. Public reference to information in a document may destroy confidentiality in that information without destroying confidentiality in the document itself. Whether confidentiality in the document is lost is a matter of fact and degree. The limited reading and description of the Majid Note at a criminal procedural hearing did not expose the document sufficiently, and disclosure was not required to enable the public to understand the decision. The note therefore remained confidential and privileged, subject to reassessment if deployed at trial.
3. Amendment and impairment. The court permitted a confined allegation concerning the Audit Committee’s alleged knowledge that discount and growth rates fell outside PwC’s acceptable range, together with a limited inference concerning the knowledge of Mr Clarke and Mr McIlwee. The broader inference that aggressive accounting practices were directed by them was unsustainable and was deleted. Further determination of the wider impairment case was adjourned pending time-limited searches and disclosure, with preservation of the trial date as the controlling consideration.
4. Letters of request. The court confirmed its inherent jurisdiction to request foreign production of particular documents. The documents had to exist, be readily identifiable and be admissible in the English actions. Those requirements were satisfied for documents and models held by Dimensional in New South Wales and TGAL in the Bahamas. Letters of request were issued, subject to confidentiality safeguards and undertakings concerning the Secretary of State’s expenses.
5. Other case management. The Frankfurt Trust disclosure proposal was insufficiently flexible to allow Tesco properly to test the model. The parties were directed to seek a revised arrangement, potentially involving an approved independent supervisor. The trial estimate was increased to 56 days, generally sitting four days per week.