UTB LLC v Sheffield United Ltd & Ors

The Chancellor applied the new Practice Direction 51U (the Disclosure Pilot) to further disclosure applications made after 1 January 2019 even though an earlier order for standard disclosure had been made under CPR Part 31. The court summarised the scope and tests for Extended Disclosure under PD51U (including Models C and E) and emphasised proportionality and cooperation.

Permission to amend was granted in part: limited amendments to Sheffield United Limited’s pleadings and petition were permitted (including converting a non-admission into a denial, additions relating to a witness, and limited financial/solvency material and company historic losses), but further late amendments concerning Prince Abdullah’s personal finances were refused as disproportionate and not likely to affect the central issues.

The court considered extensive challenges to claims of legal professional privilege in communications between Prince Abdullah and Mr Giansiracusa. After inspecting two redacted email exchanges, and having reviewed the disclosure process undertaken by Jones Day, the court concluded that the UTB parties had established privilege over the principal categories of documents sought by Sheffield United and refused the applications for extended disclosure of those categories and of other intrusive material (passports, calendars and financial documents). The court reiterated that inspection of privileged documents is a discretionary power exercised only when necessary and proportionate.

Background and parties: This judgment arose on a pre-trial review of multi-track commercial proceedings between shareholders in Blades Leisure Ltd and related claims including a claim for specific performance and a petition under section 994 of the Companies Act 2006. The parties were UTB LLC and associated UTB parties (including Prince Abdullah) and Sheffield United Limited (SUL). The dispute concerned share transfers, exercise of property call options and related allegations including conspiracy and alleged impropriety surrounding a third-party loan (the Charwell Loan).

Nature of the applications: The court determined: (i) whether PD51U applied to further disclosure applications made after 1 January 2019 in a case where standard disclosure under CPR Part 31 had been ordered earlier; (ii) whether SUL should be permitted to make a series of late amendments to its Defence, Counterclaim and Petition; and (iii) whether UTB’s claims to legal professional privilege over large numbers of documents (principally communications between Prince Abdullah and Mr Giansiracusa) were properly made or should be disallowed or inspected.

Issues framed by the court:

• Application of PD51U to existing proceedings and the effect of paragraph 1.2 and paragraph 1.3 (whether the Pilot applies when earlier disclosure orders exist).
• Test for Extended Disclosure under PD51U (reasonable and proportionate, issues for disclosure, Models C and E).
• Principles governing legal advice privilege and litigation privilege where a lawyer also acts in a commercial or executive capacity; and the court's discretion to inspect documents where privilege is challenged.
• Whether late amendments should be permitted in light of finality, prejudice and proportionality.

Court’s reasoning and outcome on those issues:

• PD51U applies to existing proceedings commenced before 1 January 2019; the Pilot does not disturb pre-existing disclosure orders but may be applied where variation or further disclosure is sought.
• The court set out the PD51U approach to Extended Disclosure, emphasising that requests must be directed to defined "Issues for Disclosure" and satisfy the reasonableness and proportionality criteria (factors in paragraph 6.4). Models C (request-led, narrow) and E (wide search-based) are to be employed only where appropriate; Model E is exceptional.
• On amendments, the court allowed limited late amendments addressing the company’s historic losses, reliance on investor support and a small number of particularised matters, but refused amendments that would open an extensive inquiry into Prince Abdullah’s personal finances because that issue was peripheral and disproportionate to the central dispute.
• On privilege, having considered the disclosure work undertaken by UTB’s lawyers and inspected two Redacted Documents, the court concluded that UTB had made good its claims to legal professional privilege in respect of the primary categories challenged. The court refused SUL’s applications for extended disclosure of privileged communications, further inquiry into the Riyadh strategy meeting and intrusive personal material (passports, calendars, and financial documents) as not necessary or proportionate to fairly resolve the key issues.

Procedural posture: This was a pre-trial review at first instance; the trial remained listed shortly after and the judge dealt with the pre-trial disclosure and pleading issues in anticipation of that expedited trial.

The court allowed the petitioner's application to amend in part (limited amendments to the Defence, Counterclaim and Petition as specified) but refused the majority of Sheffield United’s applications for extended disclosure. The Chancellor held that Practice Direction 51U applies to existing proceedings and that the UTB parties had validly claimed legal professional privilege in respect of the main categories of communications challenged; inspection of privileged documents is a discretionary remedy to be exercised only when necessary and proportionate, and here extended disclosure and intrusive financial and personal disclosure were refused as unnecessary and disproportionate.