Loreley Financing (Jersey) No. 30 Limited v Credit Suisse Securities (Europe) Limited & Ors.

Disclosure of documents held by a third party requires evidence of either a legally enforceable right of access or a standing or continuing practical arrangement permitting access. A close legal or commercial relationship is insufficient. An agency relationship may establish control, but only where the agency extends to the documents sought and the agents act in that capacity. Access obtained by individuals as employees of a third party does not create control for their separate role as agents of the litigating party. Such control is unusual and requires specific evidence. An application to vary disclosure must also satisfy a requirement of necessity and address a key issue; the fact that material is easy to obtain or potentially useful is insufficient.

The claimant brought proceedings alleging fraudulent misrepresentation concerning a synthetic collateralised debt obligation. The defendants applied for disclosure of documents held by KfW, a creditor and funder connected with the claimant’s litigation, relying in particular on two individuals who were KfW employees and also involved in managing the claim.

The application raised whether those documents were within the claimant’s control for disclosure purposes, whether the application was made too late, and whether further disclosure of agreements and invoices should be ordered. The court also considered an application to vary the disclosure regime in relation to reliance evidence.

1. Third-party control. The application for disclosure of KfW documents was refused. The authorities required evidence of a legally enforceable right of access or a standing or continuing practical arrangement under which the third party allowed access. A close legal or commercial relationship, including a creditor relationship, was insufficient. The authorities also indicated that unfettered access and a general right to request documents were normally required.
2. Agency. An agency relationship could provide the necessary basis for control, but the relevant question was the scope of the agency. Messrs Bulgrin and Christ had access to KfW documents as KfW employees, not as agents of the claimant. Their involvement in conducting the litigation did not provide access to all KfW documents concerning the underlying subject matter. The asserted inference of control was therefore unsupported, particularly in light of evidence of requests and refusals by KfW.
3. Control over a creditor’s documents was not impossible, but it was unusual and required evidence satisfying the applicable test. The court rejected the submission that the provision of personnel to manage litigation logically entailed control over the creditor’s historical documents.
4. The court would, if necessary, also have refused the application as too late. KfW’s involvement had been apparent earlier, and the application was made six weeks before trial, creating a substantial disclosure and case-management burden.
5. Disclosure of two agreements to which the claimant was party was ordered under the agreed privilege regime. The application concerning invoices was refused insofar as it concerned limitation evidence, because the material was not necessary and was unlikely to be probative. Disclosure for the shorter period concerning reliance was ordered because reliance was a key issue and the documents were the only practical means of testing the relevant evidence.