IBM United Kingdom Limited v LzLabs GmbH & Ors

The court may vary an extended disclosure order only where the additional disclosure is necessary for the just disposal of the proceedings and reasonable and proportionate. Relevance and a likelihood of probative value do not justify unrestricted investigation. The court must balance evidential value against volume, cost, disruption and the need for an expeditious, fair and proportionate trial.

A request for historic distribution-list information may amount to a Model E trail of inquiry and will ordinarily require exceptional circumstances. A solicitor supervising large-scale disclosure need not attend or control every stage personally. Confidentiality designations must be justified by the nature and sensitivity of the information, and must remain under review.

The claimant sought declaratory, injunctive and monetary relief alleging that the defendants had used access to IBM mainframe software to develop a software-defined mainframe in breach of a licence agreement. The defendants disputed the allegations and brought counterclaims.

The judgment determined several interlocutory applications concerning additional custodians and distribution-list information, the adequacy of disclosure from a customer-support portal and related PowerPoint searches, confidentiality designations, substitute custodians, and admission of two specialist individuals to an inner confidentiality ring.

1. Additional disclosure. The claimant had to satisfy Practice Direction 57AD, paragraph 18.2. The court accepted that communications involving secondees, intermediaries and certain technical personnel were likely to exist and have probative value. However, the proposed searches had to remain reasonable, proportionate and necessary for the just disposal of the proceedings. Martin Truebner, Damon Cross, Brad Taylor and David Bond were therefore added as custodians. The wider request concerning Winsopia employees was refused because the existing searches and disclosure were sufficient and the proposed extension would be oppressive.
2. Distribution lists. Historic information about recipients and changes to distribution lists was refused. The information was sought to reveal possible recipients rather than as relevant documents in its own right. It therefore had the character of a Model E trail of inquiry, and exceptional circumstances had not been established.
3. CSP disclosure and searches. The defendants’ challenge to the disclosure certificate and requests for further searches were speculative. The CPR did not require a solicitor overseeing disclosure to be physically present and actively supervise every stage. In the absence of identified gaps or errors, the application was dismissed. Live inspection was not imposed without agreement, and the defendants had not shown that it was reasonable, proportionate or necessary.
4. Confidentiality. Applying the principles identified in Oneplus Technology (Shenzhen) Co, Ltd v Mitsubishi Electric Corp [2020] EWCA Civ 1562 (CA), the court balanced access to relevant material against protection of confidential commercial and technical information. Several customer and inner-ring designations were upheld. Non-confidential client letters, event material and administrative emails were removed from the outer ring, while documents concerning commercial strategy remained protected.
5. Inner confidentiality ring. Robert Jones and George Burgess were admitted as necessary support personnel. Their specialist expertise was relevant, and supervision by independent external experts together with confidentiality undertakings provided sufficient safeguards despite their former IBM employment.
6. The parties were directed to draw up an order reflecting the decisions, with consequential matters to be dealt with at the next CMC if not agreed.