Rowe & Ors v Ingenious Media Holdings Plc & Ors

Disclosure must be fair, proportionate and reasonable. In claims concerning investment advice, a claimant’s financial sophistication and appetite for risk may justify disclosure of the claimant’s investment history, but disclosure should be focused on material capable of addressing the pleaded issue. Where a defendant alleges that the claimant would have made another failed investment, the claimant need not initially prove what would otherwise have been done. The defendant must plead and prove that alternative case. A proportionate two-stage process may require a schedule of actual investments and specific potential tax-planning investments, followed by documents sufficient to show their nature and risk. Disclosure of unrelated investments is generally inappropriate where it cannot realistically assist the pleaded issue.

The judgment concerned a case management issue in coordinated claims arising from investments in Ingenious partnerships. The claimants alleged deceit, misrepresentation, negligence and related causes of action against the Ingenious defendants, advisers and financial institutions. At CMC 3, the court considered whether claimants should disclose information and documents concerning other investments and investment advice.

The proposed disclosure was said to bear on two issues: the claimants’ financial sophistication and appetite for risk in the adviser claims, and whether they would have made other investments which would also have failed, thereby affecting causation and loss. The principal question was the proper scope and form of proportionate disclosure on those issues.

1. Disclosure directions. The court accepted a two-stage process: each claimant was to provide a schedule of investments, followed by disclosure of documents sufficient to show the nature and risk of relevant investments. The schedule was to cover investments made during the three years before each Ingenious investment, including top-ups, and the following year. It was also to identify specific potential investments in tax-planning schemes on which professional advice was taken or received.
2. Adviser claims. The claimants’ financial sophistication and appetite for risk were potentially relevant to the scope of the advisers’ duty of care. The disclosure should therefore provide a proportionate snapshot of each claimant’s investment history. There was normally no need to disclose documents relating to investments made through the relevant adviser, since the adviser should possess the relevant records.
3. Loss and causation. A claimant who shows that a capital sum was lost as a result of a legal wrong is prima facie entitled to recover that sum, with applicable interest. The claimant need not prove what would otherwise have been done with the money. If a defendant contends that the claimant would have made another investment and suffered an equivalent or greater loss, that is a matter for the defendant to plead and prove. The court referred to Equitas Ltd v Walsham Bros & Co Ltd [2013] EWHC 3264 (Comm) and the principle in Sempra Metals Ltd v IRC [2007] UKHL 34.
4. Limits. For the loss issue, disclosure was confined to actual or potential tax-planning schemes. General investment experience was not shown to be materially relevant to whether alleged misrepresentations had been made or relied upon. Further specific disclosure could be sought after the initial schedule and limited disclosure had been provided.