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Disclosure of documents in a court action can be fraught with
arguments. It is an important step, as the purpose of
disclosure is to make available evidence, which either supports or
undermines the respective parties' cases.
A recent decision in the case of Gray Construction Limited v
Harley Haddow LLP considered the issue of confidential
documents, in the context of an arbitration settlement.
Facts
Gray Construction Limited ("Gray") was suing Harley
Haddow LLP ("Harley Haddow") for damages, for alleged
breach of contract and negligence - quantified on the basis of sums
which Gray spent in an arbitration with the NHBC, about defective
house foundations at a development in Dunfermline. The
arbitration between Gray and the NHBC was settled by Gray's
payment to NHBC of £110,000. Gray sought recovery of
that sum plus one half of the arbiter's charges and other fees
and expenses.
Harley Haddow applied for recovery of the documents relating to
the arbitration, in order to understand the legal and factual basis
of NHBC's claim against Gray, the circumstances surrounding
settlement, and the reasonableness of the settlement.
Gray argued that these documents were confidential and were not
needed by Harley Haddow in order to defend the court action. Gray
had offered to produce an affidavit from the solicitor who acted
for it in the arbitration with the NHBC to provide all information
which Harley Haddow would reasonably require, in order to
understand NHBC's claim and the circumstances surrounding
settlement.
It was conceded that the documents sought by Harley Haddow did
not contain sensitive commercial data. Nonetheless, it was
accepted, given that arbitrations are private, that the documents
were confidential. The question to be decided was whether the
Court could, and should, override the obligation of
confidentiality to require disclosure of the documents.
Decision
Examining the law in this area, the Court considered that a
balance required to be struck between respecting parties'
rights to privacy in arbitration proceedings and the public
interest in the fair administration of justice. In this case,
the Court considered that the documents in question were necessary
to allow Harley Haddow properly to prepare its defence to the
action, and the affidavit which Gray offered would not be
sufficient to allow a full and proper examination of matters in
advance of the trial.
Whilst the rules of disclosure are different in Scotland and
England, the underlying principle that a court may, in certain
circumstances, allow disclosure in the public interest applies in
both jurisdictions. This is something which should always be
borne in mind by parties, when seeking to protect their commercial
interests.
The material contained in this article is of the nature of
general comment only and does not give advice on any particular
matter. Recipients should not act on the basis of the information
in this e-update without taking appropriate professional advice
upon their own particular circumstances.
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