In Vilca v Xstrata Ltd,(1) a dispute about the treatment of protestors at copper mines in Peru, the English High Court reinforced the breadth of the test for disclosure (or discovery in the United States) and held that it has the power to order a party to appoint a separate law firm to conduct an independent re-review of its disclosure. Although the court chose not to exercise that power in this case, the decision is a warning to litigants (and their lawyers) that errors in disclosure can have costly consequences.
The defendants were part of large multinational mining group Xstrata (which was subsequently taken over by another group, Glencore plc). A significant part of Xstrata's business was its copper mining business. Xstrata's assets included copper mines at Tintaya and Antapaccay in southern Peru.
It was common ground between the parties that considerable tension could arise between members of the local community, the operators of the mine and local security forces in areas where mines were set. Police commonly suppressed protests and it was not unknown for this to involve considerable violence. There was a tradition of disturbances on May 21 each year around the Tintaya mine and in May 2012 community protests started to build up. The second defendant engaged the Peruvian National Police to assist in dealing with the protests and paid them for their services. The protest continued for a number of days and on May 28 2012 the Peruvian government declared a state of emergency; the protest ended soon thereafter.
The 22 claimants alleged that protestors were subjected to extreme violence by the Peruvian National Police and that others may have been involved. The protests resulted in two deaths by shooting, one case of critical spinal injury, numerous other severe injuries and alleged beatings, arbitrary detention and other abusive actions by police, in many instances within the mine compound itself.
Based on those events, the claimants alleged various breaches of both English and Peruvian law, including allegations that the defendants incited, procured or participated in the police violence, facilitated the unlawful actions of the police by offering logistical support, facilities and information, and also bore responsibility through breach of a duty of care owed to the protesters. There was also an issue about vicarious liability. All of these allegations were firmly denied by the defendants.
Disclosure – the process in the English courts by which the parties exchange documents that may assist or undermine each other's case – was hotly contested in this case. There was a considerable divergence of view between the parties as to which documents fell to be disclosed and, after a December 2015 hearing, the parties found themselves back before the court on three separate occasions between February and July 2016 on the topic of disclosure.(2) As a result, the three-week trial listed to begin in mid-June 2016 was postponed until further notice. The most recent hearing before the court in July 2016 concerned the claimants' application that the defendants be ordered to procure "an appropriate re-review of their disclosure" to be carried out by an independent lawyer.
The claimants suggested that the disclosure process was not being carried out by the defendants in accordance with the normally accepted criteria and that the defendants' approach to it had been "grudging". The claimants sought an order for an independent re-review of the defendants' disclosure, primarily on the basis that the defendants' initial failure to disclose a "relevant and disclosable" email raised concerns about the integrity of the whole disclosure process.
Were the defendants wrong to withhold the email initially? Under standard disclosure principles (set out in Civil Procedure Rule 31.6), each party must disclose documents that:
- adversely affect its own case;
- adversely affect another party's case; or
- support another party's case.
Broadly, the defendants argued that this test should be applied by reference to the parties' agreed list of issues in the case, while the claimants contended that it should be applied to the facts and issues set out in the parties' pleadings – a more expansive approach. The court concluded that the defendants' proposed test was too narrow. Not only would the documents relating to the specific protests be relevant, but also those relating to the defendants' more general attitudes to the protests. The court emphasised that any document that threw light on the attitude of anyone within the defendants' organisations with:
"arguably potential influence over how the companies within the group would react to, and give instructions relating to the handling of, the proposed or actual protests relating to the Tintaya mine is relevant and disclosable."
The court went on to state:
"That is so wherever the document may have been generated. Any such document may, of course, throw a beneficial light on those attitudes; equally, it may not. But whatever its complexion, it is disclosable."
Accordingly, the failure to disclose the relevant email in issue at an earlier stage in the disclosure process had been an error.
Did the error justify ordering re-review of the disclosure by independent lawyers? When considering whether the late disclosure of the email in issue was sufficient to justify an independent re-review of the defendants' disclosure exercise carried out to date, the court had no doubt (consistent with Justice Teare's thinking in Nolan Family Partnership v Walsh(3)) that such an order was available to it to make, despite the fact that such an order would be unprecedented. However, the court noted that it would be a "most unusual order" to make, pointing in particular to the fact that such an order would impose a costs burden on the client whose solicitors' conduct was the reason for the re-review. It would therefore require "strong grounds" for such an order to be made. The court did not consider that what was in reality one erroneous (albeit significant) decision, corrected quickly, by a law firm in good standing was sufficient to justify such an order in this case.
However, the court asked the defendants' solicitors to submit to it, within 14 days, a plan to produce a "sensible formula" for reviewing the defendants' disclosure to ensure that no documents had been unjustifiably excluded. After the claimants had had an opportunity to comment on it, the court would then consider whether it was acceptable. The threat was left hanging as to what the court would do if it was not.
Further, despite the defendants being anxious for a trial date to be set fairly soon, the court commented that until it was reasonably satisfied that all proper disclosure and inspection had taken place, it was "reluctant to set this case on a path towards trial".
Despite the fact that an independent re-review of a party's disclosure has never been ordered by the court, such an order is still available to the court should it be deemed necessary. At the very least, should a dispute between the parties over disclosure arise that ends up before the court, solicitors on either or both sides are likely to be expected to provide detailed justifications for their actions and decisions taken throughout the disclosure process. Here, the court adopted a halfway house – re-review by the defendants' existing solicitors – but even that will no doubt incur additional costs and has delayed a process that the defendants wanted to expedite.
The case also reinforces the breadth of the test for standard disclosure used in most High Court cases. However, the courts are concerned by the rising costs of disclosure in commercial cases, which is a function of the extent of the search for documents and the time taken to review large numbers of documents. Some courts, such as the Technology and Construction Court, already adopt tighter, more issues-based approaches (such as the defendants argued for here) to manage the extent of disclosure. It may be that the courts will move towards more proactively controlling the extent of disclosure in appropriate cases. Watch this space.
For further information on this topic please contact Davina Given or Alexis Hogan at RPC by telephone (+44 20 3060 6000) or email (firstname.lastname@example.org or email@example.com). The RPC website can be accessed at www.rpc.co.uk.
(3)  EWHC 535 (Comm).
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