An Australian approach to inadvertent disclosure
Return to sender: Inadvertent discovery of privileged documents - The Australian approach
The High Court of New South Wales, Australia, recently endorsed a pragmatic approach to the management of discovery and ordered the return of privileged documents produced in error. In the case of Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46, the Defendant’s lawyers inadvertently disclosed a number of privileged documents. They subsequently requested the return of those documents and an undertaking that they would not be relied on. The Claimant’s lawyers refused, not because it disputed the assertion of inadvertence, but because of its view that any privilege attaching to the documents had been waived.
The High Court endorsed the principles in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1, that in determining whether a waiver has occurred, consideration of fairness should inform the court's view on the inconsistency between a party's conduct and maintaining confidentiality. In this case there was no significant delay and, in any event, waiver of privilege did not occur as no inconsistency was found to arise.
In its ruling, the Australian High Court recognised that discovery in large commercial cases is an "inherently intrusive process" during which mistakes may happen. It held that the courts of New South Wales should actively engage in case management, in order to achieve the overriding purpose of the Civil Procedure Act 2005 to “facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings". It sent a clear message that satellite litigation on peripheral issues should be discouraged, and gave an important reminder about the ethical responsibilities incumbent upon the legal profession. Although referring to Rule 31 of the Australian Solicitors' Conduct Rules, which places a duty on a solicitor to return material, which is known or reasonably suspected to be confidential, where a solicitor is aware that its disclosure was inadvertent, the High Court made it clear that even in the absence of such a rule, legal practitioners have professional and ethical obligations to support the objectives of the proper administration of justice.
The approach of the English and Welsh courts
In so far as the courts in this jurisdiction are concerned, the requirement that the court should give effect to the overriding objective when exercising any power does not affect the established principles in Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 W.L.R 1027. This was most recently confirmed in DuPont Nutrition Biosciences ApS v Novozymes A/S (UK) [2013] EWHC 155 (Pat) where the court made use of the power in CPR 31.20.
However, although this bold decision in Expense Reduction Analysts is not binding in the UK, it will be interesting to see how this area of law develops in our jurisdiction in due course. In light of the rationale adopted and the principles drawn upon, one can easily see the parallels when considering our own courts’ overall powers of case management.
There are already some examples of the application of the courts’ recognition of their overriding case management powers in encouraging co-operation between the parties when such errors are made. In Hertsmere Primary Care Trust v Administrators of Balasubramanium's Estate [2005] 3 All ER 274, the claimants sent an offer letter which did not technically comply with the CPR. Upon realising the error, the defendant’s solicitors sought to take advantage of it at a later date in resisting a Calderbank-style order for costs. Lightman J rejected the defendant's submission that there was no duty on the part of its lawyers to cooperate and enable the claimants to rectify the error, stating at 278[11]: "that may have been the law prior to the CPR, but it is not the law today."
In Al Fayed v Commissioner of Police for the Metropolis [2002] EWCA Civ 780, when considering the use of inadvertently disclosed documents it was held that in any case “the court retains all its other powers of case management including those relating to the use and deployment of documents and their contents”.
In light of the most recent reforms, the courts’ use of the overriding objective to deal with cases justly, and at proportionate cost, (CPR 1.1), is becoming more and more prevalent. The courts may continue to further that objective by adopting this somewhat stark and interventionist approach, as a way of actively managing cases, maintaining fairness and reducing satellite litigation. Whether they will succeed in this endeavour is yet to be determined.
