Supreme Court sets out correct test for applying a condition of a payment into court for the continuation of an appeal
The claimants applied for permission to bring committal proceedings against the defendants and their solicitors. Those defendants had previously obtained a Norwich Pharmacal order ("NPO") which was then replaced by a consent order. The consent order did not specify the use which could be made of documents disclosed pursuant to the order. After receiving the documents, the defendants' solicitors wrote to a former employee of the claimants warning that if certain steps were not taken by him, proceedings would be commenced against him.
The claimants allege that that was a breach of CPR r31.22 because the defendants and their solicitors were using the disclosed documents for a collateral purpose.
Birss J has now held as follows:
- Committal proceedings could be brought against the defendants, as well as their solicitors, because (on the evidence) any misconduct by the solicitors was done on the instructions of the clients (albeit those instructions were on the solicitors' advice).
- As there was nothing expressly provided for in the consent order, CPR r31.22 applied.
- Reference was made to the earlier decision of Tchenguiz v Grant Thornton in which it was held that if the purpose of a review of disclosed documents was to advise on whether other proceedings would be possible, then the review would be a use for a collateral purpose, but if the purpose of the review had been to advise on the ongoing litigation, but when undertaken the review showed that other proceedings would be possible then the review would not have been for a collateral purpose (a further step would be a use for a collateral purpose, but the use of the document for the purpose of seeking permission or agreement to take that further step would be impliedly permitted). Here the review had been for orthodox reasons in the course of existing proceedings.
- Furthermore: "If a party reviewing documents disclosed in a given set of proceedings identifies that there is a properly arguable basis for joining a third party into those proceedings as a co-defendant with the existing defendants, in relation to the existing causes of action pleaded in the proceedings, then that party has done nothing other than use the documents for the purposes of the proceedings in which they were disclosed".
- However, here, new proceedings were threatened against the third party, and that had been a breach of CPR r31.22.
- The application for permission to bring committal proceedings was refused, though, on the basis that there was no prima facie case of a deliberate or reckless breach of the rule. It was also relevant in this case that, had the NPO still be in place, the solicitors could have written the letter which they sent to the former employee.