Fiesta Hotels and Resorts SL & Ors v Deutsche Bank AG & Anor

Disclosure for trial must be assessed with close attention to practical utility, necessity, reasonableness and proportionality. Material which may reveal embarrassing correspondence or assist general fraud analysis is not necessarily properly probative of the issues to be decided. Documents may nevertheless have limited utility for testing the factual narrative or cross-examination. The court must assess proportionality in the circumstances existing when the application is made, taking account of financial and other costs. Where disclosure is marginal, the appropriate response may be a tightly focused order directed to documents with a realistic trial purpose, together with targeted steps to identify any significant gaps.

The claimants, who pursued claims concerning alleged restructuring fraud, sought further disclosure relating to Project Fox. The application focused on documents surrounding the project and material which might assist the fraud analysis or provide material for use with witnesses and in submissions at trial.

The defendants offered limited additional disclosure. The court had to determine whether the wider disclosure sought satisfied the requirements of paragraph 18 of Practice Direction 57AD, particularly whether it was necessary for trial and reasonable and proportionate in the circumstances.

1. The application was marginal. Much of the material sought was material which a party advancing a fraud claim would ideally wish to see, including potentially embarrassing correspondence and material that might shorten the analysis of what was abnormal. That did not primarily engage with the issues requiring determination in the restructuring fraud claim.
2. Some correspondence could have a proper trial purpose. It might assist in testing the account of what was done, why it was done and the state of mind of those allegedly involved in fraud. Its value was principally for cross-examination and was secondary rather than strongly probative.
3. Paragraph 18 of Practice Direction 57AD required close consideration of what was necessary for trial, together with reasonableness and proportionality. The necessity requirement was probably not met, although the case was marginal. Proportionality had to be assessed in light of the stage reached in the litigation and the circumstances then prevailing, including financial and non-financial costs.
4. The court therefore ordered only the additional disclosure offered by the defendants, together with an audit of the relevant timeline. If identifiable gaps in email traffic remained after review of the locally saved documents file and the ten identified documents, the parties were to consider whether the missing material, including a possible communication from the BCU, could sensibly be obtained.
5. The court considered the chief investigator’s maintained file a practical shortcut. If it contained relevant documents or revealed further missing documents, that material should be pursued. The wider disclosure sought was not ordered.