Parties Listed at Schedule 1 to the N244 v Kroll Trustee Services

An order for pre-action disclosure under rule 31.16 may be made where the intended claimant and respondent are likely to be parties, the documents would fall within standard disclosure, and disclosure is desirable to dispose fairly of the proceedings, assist resolution without proceedings or save costs.

The discretion must be exercised broadly, on all the facts and in detail. Confidentiality owed by the intended defendant to other intended defendants will not ordinarily justify refusal where the documents would be disclosable after proceedings are issued. The court may order targeted disclosure needed to identify the claim, potential defendants and the value of relevant benefits.

The applicants, including Deutsche Bank AG and accounts managed by Oaktree Capital Management entities, sought pre-action disclosure from Kroll Trustee Services, security agent and trustee under an intercreditor agreement concerning the restructuring of approximately €650 million of Hurtigruten Group debt.

They intended to challenge the majority lenders’ instructions as an abuse of power, alleging that an ad hoc group obtained disproportionate benefits. The documents sought concerned the restructuring transaction, instructions to Kroll, FRP Advisory’s fairness analysis, and individual and aggregate holdings. Kroll relied on confidentiality obligations and disputed the breadth of the final category.

1. Application granted. The court ordered the agreed categories of pre-action disclosure, including documents evidencing individual holdings and cross-holdings.
2. Under CPR 31.16 and paragraph 31.16 of Practice Direction 57AD, the applicants had to show that they were likely to be parties to intended proceedings, Kroll was likely to be a party, the documents would fall within Kroll’s standard disclosure, and the order was desirable to dispose fairly of the proceedings, assist resolution without proceedings or save costs.
3. The court’s discretion was broad and had to be exercised on all the facts and in detail, applying Black v Sumitomo Corp [2002] 1 WLR 1562 at [81]. The proposed claim was legally coherent, and the documents were likely to be among the most relevant evidence. Disclosure would assist accurate pleading, might promote compromise and was likely to save costs.
4. Kroll was likely to be a proper party because it had carried out the challenged acts and declaratory relief would bind it. A freestanding cause of action against Kroll was unnecessary at the pre-action stage: it was sufficient that Kroll was likely to be a party against whom disclosure would later be ordered. The court relied on Rolls Royce v Unite the Union [2010] 1 WLR 318 at [120].
5. Possible contractual rights to the documents did not make the rule 31.16 route inappropriate. Nor did confidentiality justify refusal. If proceedings were issued against members of the ad hoc group, the documents would fall within their disclosure obligations, so confidentiality would provide no answer in the proceedings themselves.
6. Individual as well as aggregate holdings and cross-holdings were relevant. Fairness might depend on the benefits obtained by particular participants and on whether they supplied new funding.