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

Practical control over documents held by a third party requires evidence of an existing arrangement or understanding giving the litigating party access. A close client–professional adviser relationship and voluntary co-operation are insufficient without more specific and compelling evidence.

An application to vary extended disclosure must satisfy both necessity for the just disposal of the proceedings and reasonableness and proportionality. Relevance alone does not establish a likelihood that further documents will have probative value.

Third-party disclosure is exceptional. Each document in a proposed class must meet the threshold that it may well support the applicant’s case or adversely affect another party’s case. A broad class containing documents unrelated to the dispute cannot be ordered.

The defendants sought recordings of calls between the claimants and Saranac Partners Limited. They applied first for additional disclosure from the claimants under paragraph 18 of Practice Direction 57AD and, alternatively, for third-party disclosure from Saranac under CPR 31.17.

The claimants and Saranac had co-operated in obtaining and providing some recordings, but Saranac maintained that it had no obligation to search and had acted voluntarily through its lawyers. The issues were whether the claimants had practical control over the recordings, whether further disclosure was necessary, reasonable and proportionate, and whether the proposed class satisfied the threshold and necessity requirements for third-party disclosure.

1. Further disclosure from the claimants. Practical control requires evidence of an arrangement or understanding under which the third party will search for relevant documents or make them available. A client–independent professional adviser relationship is relevant but not determinative. Voluntary co-operation, expressly subject to reservations, legal review and payment of costs, did not establish that the claimants had an entitlement to unfettered access. The claimants therefore lacked practical control over the recordings (paras [22], [39]–[42]).
2. The application consequently failed. In any event, it would have been dismissed under paragraph 18.2. The defendants had to show both that further disclosure was necessary for the just disposal of the proceedings and that it was reasonable and proportionate having regard to paragraph 6.4. Relevance was insufficient. In light of the extensive searches already conducted, the evidence did not establish a likelihood that further recordings with probative value existed. The breadth, cost and practical difficulty of further searches also weighed against the order (paras [43]–[55]).
3. Third-party disclosure. Under CPR 31.17(3), the documents sought had to be likely, meaning they may well, to support the applicant’s case or adversely affect another party’s case, and disclosure had to be necessary to dispose fairly of the claim or save costs. Where a class is sought, every document in the class must satisfy the threshold. The proposed class included failed calls, administrative and KYC conversations, and calls unrelated to derivatives trading. The defendants had not shown that the class as a whole met the threshold (paras [57]–[66]).
4. The court also considered the extensive searches already undertaken and the practical implications of further searching. Neither a numerical analysis of documents disclosed nor the possibility that some further calls might assist justified the order. The court was not satisfied that CPR 31.17(3) was met and, even if it had been, would have declined relief in its discretion. The Third Party Disclosure Application was refused (paras [67]–[72]).

First-instance decision. No appellate history was stated in the judgment.