Phones 4U Ltd v EE Ltd & Ors

When documents within a party’s control may be mixed with private material held on an employee’s or former employee’s personal device, the court may direct the party to request voluntary access for a proportionate search. CPR Part 31.5(8) permits practical directions about where, how and by whom that search is undertaken.

The court cannot compel disclosure of material outside the party’s control. It may, however, require a request to a third party as part of identifying and disclosing controlled documents. Any mechanism must balance the administration of justice against affected persons’ privacy rights. Appropriate safeguards may include independent searching, restrictions on access and use, undertakings, limits on custodians and liberty to apply.

Phones 4U Ltd, in administration, claimed that mobile network operators had participated in anti-competitive arrangements which caused the termination or non-renewal of their supply agreements. It also advanced contractual and economic tort claims. The defendants denied the allegations.

Roth J ordered the corporate defendants to ask selected employees and former employees to provide personal devices and email accounts voluntarily to IT consultants. The consultants would search for work-related communications within the defendants’ control and give protective undertakings concerning private material.

The defendants appealed. The issues were whether the court had jurisdiction to direct such requests, whether the judge should have suggested that custodians should not be told that they could refuse, whether the search mechanism was proportionate, and whether it complied with data-protection law.

1. The substantive appeals were dismissed. The judge had jurisdiction to order the defendants to ask custodians voluntarily to provide personal devices and emails to IT consultants. The mechanism was appropriate and proportionate. The judge should not, however, have suggested outside the order that the defendants ought not to tell custodians that they could refuse: paras [24]–[32], [51]–[55].

2. CPR Part 31 does not empower the court to require a party to disclose or permit inspection of documents outside its control. That was the limit of the principle in Lonrho v Shell. Here, however, the work-related communications were accepted to be within the relevant defendant’s control even when held by an employee or former employee on a personal device: paras [24]–[27].

3. Disclosure is a pragmatic process intended to place relevant documents before the trial court. Under CPR Part 31.5(8), the court may give broad directions about how disclosure is to occur, including where, for what, by whom and over what period electronic searches should be undertaken. The power permitted directions requiring parties to make voluntary requests of third-party custodians as part of searching for documents within the parties’ control. Compulsion of the third party would require CPR Part 31.17 or another procedure to which that person was a party: paras [25]–[31].

4. A disclosure mechanism affecting mixed business and personal material must balance the due and efficient administration of justice against privacy under article 8 of the Convention. The solution must also be workable, reasonable and proportionate under the CPR and the overriding objective. The judge acted within his case-management discretion by using IT consultants subject to comprehensive undertakings and limiting the number of custodians. The voluntary character of the request and the possibility of false search results did not make the order disproportionate: paras [34]–[51].

5. It would have been preferable expressly to give custodians and other affected persons liberty to apply, although such liberty could be implied. Processing by the consultants would rest on the custodians’ consent under article 6.1(a) of the GDPR and compliance with a legal obligation under article 6.1(c). The administration of justice was also recognised as a public-interest basis by section 8(a) of the Data Protection Act 2018: paras [50]–[54].

1. Court of Appeal (Civil Division): The defendants’ substantive appeals were dismissed. The court upheld the disclosure mechanism, while disapproving the judge’s extra-order suggestion that custodians should not be told of their right to refuse: [2021] EWCA Civ 116.
2. High Court, Competition List: Roth J ordered the second to eighth defendants to ask selected custodians voluntarily to provide personal devices and emails to IT consultants for searches directed at work-related communications. No citation for that decision is stated in the judgment.