DISCLOSURE WHERE POSSIBLE BREACHES OF LAW LURK

Disclosure where possible breaches of law lurk

The IPKat has been pondering over Hughes v Carratu International plc [2006] EWHC 1791 (QB), a decision of Mr Justice Tugendhat in the Queen’s Bench Division on Wednesday and which you can read on BAILII. It's an application for disclosure prior to a possible action for breach of confidence, invasion of privacy and breach of data protection law.

Hughes obtained a letter from the Information Commissioner’s Office, telling him that some documents had been seized during the execution of a search warrant which related to transactions on his bank account. The ICO subsequently told Hughes that the subject of the search warrant was an enquiry agent, but he was not told the agent's name. Hughes later inspected some of the documents seized by the ICO, one of which had Carratu's name on it (Carratu being a corporate investigation consultancy much used by intellectual property owners in their war on counterfeits).

Hughes asked Carratu to reveal the identity of the party on whose behalf it sought the documents. Carratu refused, but said its principal was a law firm. Hughes then applied for an order that Carratu disclose (i) all documents currently or previously in its possession or control, (ii) the identity of the party or parties for whom the information gathered, and (iii) the identity of the party or parties by whom the information was gathered. He relied on the Civil Procedure Rules, rule 31.16, SI 1998/3132, which say:

"(1) This rule applies where an application is made to the court under any Act for disclosure before proceedings have started. (2) The application must be supported by evidence. (3) The court may make an order under this rule only where— (a) the respondent is likely to be a party to subsequent proceedings; (b) the applicant is also likely to be a party to those proceedings; (c) if proceedings had started, the respondent's duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and (d) disclosure before proceedings have started is desirable in order to— (i) dispose fairly of the anticipated proceedings; (ii) assist the dispute to be resolved without proceedings; or (iii) save costs".

Carratu said there should be no such disclosure: there was insufficient material before the court to show that it was likely to be a party to subsequent proceedings, as was required by the Civil Procedure Rules. Nor had a sufficient case of any civil or criminal wrongdoing been made out against either Carratu or its law firm client. Hughes said he planned to sue everyone who had done him a wrong, including Carratu, alleging possible actions for breach of confidence or privacy and under the Data Protection Act 1998.

Tugendhat J allowed Hughes' application. Hughes had passed the threshold test of establishing an arguable cause of action against both Carratu and the law firm. Indeed, arguably Hughes was entitled to the names of the individuals to whom his personal information had been communicated, and to an explanation as to what, if anything, they had done with that information. Right now it was not possible to exclude the possibility that he might be entitled to some remedy by way of injunction or damages or compensation under the Data Protection Act 1998 - any other cause of action.

The IPKat recognises the need to balance the sharply competing interests of individual privacy-protected data subjects and commercial organisations that are involved in the surveillance and information-gathering that is a necessary feature of the fight against IP crime. But, as Merpel notes, the "need to balance" involves the exercise of discretion, which in turn is a polite way of saying the "need to litigate". It's a shame that, while both data protection law and the law of disclosure have succeeded so well in employing helpful guidelines, the point at which the two bodies of law and practice is one where so much attention has to be given to the facts of each case that general guidance is hard to formulate.

Carratu International here
Best kept secrets here, here and here