Whether a document should be disclosed in possible breach of obligation to foreign regulator


The issue in this case was whether the defendant could object to inspection of one of its disclosed  documents on the basis that it believes it owes obligations to a foreign regulator and that it  would be putting itself at risk of criminal contempt of a foreign court order.

The defendant has entered into settlements with a number of regulators and prosecuting authorities,  including the US Department of Justice, with which it has a Deferred Prosecution Agreement. A footnote to that  agreement provided that the document in question should be held in confidence and not made  available to the public. Although no formal court order was drawn up, the defendant claims that a  subsequent comment by a US District Judge meant the document had to be kept under seal.

Birss J rejected the argument that the document should not be inspected in the English proceedings.  It was potentially of real significance and confidentiality is not a reason for refusing  inspection. Furthermore, the risk of the defendant being found to be in criminal contempt by the US  courts was, in this case, low. Reference was made to prior caselaw in which the risk of prosecution under a foreign law provided no defence to the making of an order  for disclosure or inspection (and in both the cases referred to, a prosecution was held to be  highly unlikely).

The judge held that the order to produce the document for inspection would take effect in four  weeks from the date it was made. That would allow the defendant time to make an application to the  US Court, should it wish to do so.  The judge was of the opinion that the US Court would be likely  to permit the defendant to fulfil its obligations to the English court. Not only would there be the usual procedural safeguards in the English proceedings,  but the judge also required permission to be sought here before the document could be referred to  in open court.

COMMENT: As mentioned, this case follows prior caselaw that the risk of prosecution under a foreign  law for contempt is no reason to prevent inspection of a document, at least in circumstances where  the risk of foreign prosecution is low. That therefore begs the question whether a court would  still adopt the same stance when exercising its discretion where the risk of prosecution was shown  to be significant (albeit not definite).