KB-2022-003316 - [2025] EWHC 2930 (KB)

Unless orders

The Court has powers to make orders to control its own process and procedure to ensure the effective conduct of litigation. CPR 3.1(3)(b) specifically provides that the Court may specify a sanction that will apply in the event of non-compliance with an order.

The imposition of a sanction of striking out a statement of case is one of the most powerful weapons in the court’s case management armoury. It is likely only to be imposed for a serious and deliberate breach, and the court must consider very carefully whether it is appropriate, proportionate and justified in all the circumstances of the case: Marcan Shipping -v- Kefalas [2007] 1 WLR 1864 [36]; Global Torch Ltd -v- Apex Global Management Ltd and Others (No.2) [2014] 1 WLR 4495 [23]-[24].

Control of documents in the context of a party’s disclosure obligations

CPR 31.8 provides:

“(1)

A party’s duty to disclose documents is limited to documents which are or have been in his control;

(2)

For this purpose a party has or had had a document in his control if –

(a)

it is or was in his physical possession;

(b)

he has or has had a right to possession of it; or

(c)

he has or has had a right to inspect or take copies of it.”

A party has control over a document held by a third party either if there is (a) an enforceable right to obtain access to the document or (b) a practical arrangement where that third party allows access to the document, as explained in Various Airfinance Leasing Companies -v- Saudi Arabian Airlines Corpn [2022] 1 WLR 1027 [21]:

“Insofar as a document is in the physical possession of a third party, meaning a person who is not a party to the action, that document is in the control of the party to the action not only where the party has a legally enforceable right to obtain access to such a document, but also where there is a standing or continuing practical arrangement between the party and the third party whereby the third party allows the party access to the document, even if the party has no legally enforceable right of such access… However, in order to establish that there is such a standing or continuing arrangement or even a specific, time-limited arrangement, whereby a third party allows a party to the action access to the document which the third party has in its possession, it is not generally sufficient to demonstrate that there is a close legal or commercial relationship between the party and third party, such as parent and subsidiary companies or employer and employee relationships; something more is required; there must be more specific and compelling evidence of such an arrangement …”

As a matter of the general law of agency the principal has access to documents in the possession of the agent relating to the activities carried out by the agent on behalf of the principal, and therefore control over the documents for the purposes of the principal’s disclosure obligations: Matthews & Malek on Disclosure (6^th edition, Sweet & Maxwell, 2024) at §§5-89 and 5-99; Fairstar Heavy Transport NV -v- Adkins [2013] 2 CLC 272 [50]-[56]; Amec Foster Wheeler Group Ltd -v- Morgan Sindell [2015] EWHC 2012 (TCC) [26]-[36]; North Shore Ventures Limited -v- Anstead Holdings Inc [2012] EWCA Civ 11 [40].

As recognised in the Saudi Arabian Airlinescase,control is not limited to situations where there is a legally enforceable right to access the documents. It is sufficient for disclosure purposes if they are under the practical control of the party as a matter of factual reality: Ardila InvestmentsNV -v- ENRC NV [2015] EWHC 3761 (Comm) [10]-[11];Berkeley Square Holdings Ltd -v- Lancer Property Assets Management Ltd [2021] EWHC 849 (Ch) [46].

The authors of Matthews and Malek on Disclosure (6^th edition) summarise the principles relevant to the determination of whether the documents held by a third party are within a party’s control as follows (at §5.97, footnotes omitted):

“…under the CPR a broader approach has been taken [to control] and an understanding or arrangement falling short of a legally enforceable contract or obligation has been held to be sufficient. The courts are prepared to look at the reality of the situation to look at whether a party has access and the quality of such access. In determining whether documents held by one person are under the control of another where there is no legally enforceable right to access the documents, the following principles have been derived from the authorities:

(1)

The relationship between the parties is irrelevant. It does not depend on there being control over the holder of the documents in some looser sense, such as a parent and subsidiary relationship;

(2)

There must be an arrangement or understanding that the holder of the documents will search for relevant documents or make documents available to be searched;

(3)

The arrangement may be general in that it applies to all documents held by the third party or it could be limited to a particular class or category of documents. A limitation such as an ability to withhold confidential or commercially sensitive documents will not prevent the existence of such an arrangement;

(4)

The existence of the arrangement or understanding may be inferred from the surrounding circumstances. Evidence of past access to documents in the same proceedings is a highly relevant factor;

(5)

It is not necessary that there should be an understanding as to how the documents will be accessed. It is enough that there is an understanding that access will be permitted and that the third party will co-operate in providing the relevant documents or copies of them or access to them;

(6)

The arrangement or understanding must not be limited to a specific request but should be more general in its nature”.

In Loreley Financing (Jersey) No.30 Ltd -v- Credit Suisse Securities (Europe) Ltd [2023] EWHC 548 (Comm), Cockerill J reviewed the relevant principles ([11]-[22]). She noted that a “degree of stringency” is required in the concept of control and emphasised (as Males J had done in Adila Investments) that the element of practical control required evidence of the requisite degree of control; a right of access that provided effectively “unfettered access”: [13], [15]. The right of access can be predicated on an agency relationship, but it goes beyond that and embraces any understanding or arrangement whereby the party with control can access the documents: [17]. In that respect, a key consideration may be whether access has been permitted in the past: [19].

On the facts in Loreley, Cockerill J held that the evidence did not show the requisite hallmarks of control. As well as being agents of the claimant, L30, the third parties were also employees of a company, KfW. A key factor in the decision on control was the capacity in which the third parties held the documents. The Judge held that [27]: “These are not documents which [the third parties] have access to as agents of L30; they have access as employees of KfW”. It was a “question of [the] hats” that were worn by the third parties, and meant that the claimant did not have the required element of control: [28]. The decision does show, however, that wearing different “hats” does not necessarily preclude a finding of the necessary degree of control. It depends on the particular factual relationship.