Breitenbach & Ors v Canaccord Genuity Financial Planning Ltd

Initial disclosure under paragraph 5 of CPR Practice Direction 51U is confined to key documents relied on in a pleaded case and documents necessary to enable the opposing party to understand the case it must meet. Documents may be important for testing the strength of a defence or proving it without being necessary to understand the pleaded defence. A generic defence that a defendant conducted centralised due diligence and gave oral and written advice may therefore be intelligible without disclosure of all standardised materials relating to those matters. Documents relating to a pleaded defence may fall within extended disclosure, but that does not bring them within the narrower criterion for initial disclosure.

The claimants in claims concerning advice on film-finance schemes applied at a case management conference for initial disclosure under paragraph 5 of CPR Practice Direction 51U. They sought generic or standardised documents concerning Canaccord’s alleged general practice of giving oral advice and its alleged centralised due diligence processes. They did not seek documents relating to individual meetings or claim that the documents were key documents expressly relied on in the defence. The issue was whether the requested documents were necessary to enable the claimants to understand the generic defence they had to meet.

1. The application for initial disclosure was refused. The requested documents did not fall within paragraph 5 of CPR Practice Direction 51U.
2. Paragraph 5.1 distinguishes between key documents relied on in support of a pleaded claim or defence and key documents necessary to enable the other parties to understand that case. The claimants relied only on the latter criterion.
3. Canaccord’s pleaded defence was sufficiently clear. It asserted that Canaccord had reviewed the tax schemes internally through a centralised due diligence process and that, in addition to written advice on the schemes’ merits and risks, it ordinarily gave oral advice and warnings to clients and had done so for the claimants.
4. The claimants’ wish to know precisely what due diligence had been undertaken, what conclusions had been reached and what oral advice had been given concerned the evidence needed to prove or evaluate the defence, rather than documents necessary to understand its pleaded substance. The fact that documents might be important in assessing the prospects of success did not satisfy the initial-disclosure test.
5. The pleaded paragraphs did not expressly or impliedly identify the requested documents. The claimants were speculating that such documents existed. Documents relating to a pleaded defence, whether or not supportive of it, might be within extended disclosure, but that was a different criterion.
6. Canaccord had also agreed to provide files relating to the initial sample claimants before selection of the sample claimants. The decision was accordingly made on the basis that the requested generic materials were outside initial disclosure.