Disclosure is an important stage of litigation, and sometimes parties can be prohibited by the fact that the disclosure they need or ought to obtain and disclose is not within their physical possession but held by a third party.
I remember in my litigation days that when you sued a tour operator regarding an accident or illness at a hotel abroad, the tour operator would metaphorically shrug when you sought disclosure of certain documents, as the records were held at the hotel abroad and were not the tour operator’s documents. However, it was not always as simple as that.
This article considers this issue in more detail.
To what extent can a litigant be responsible for acquiring documents held by third parties?
CPR 3.8 says the following:-
(1) A party’s duty to disclose documents is limited to documents which are or have been in his control.
(2) For this purpose a party has or has had a document in his control if –
(a) it is or was in his physical possession;
(b) he has or has had a right to possession of it; or
(c) he has or has had a right to inspect or take copies of it.
It is really easy for a party to know what is within its physical possession. The question is to what extent is the right to possess and the right to inspect and take copies of it. A straightforward example is a person’s medical records. A Claimant would be entitled to both the right to possess, inspect or take copies of it.
What about bank statements? The same principle would apply as it would to medical records, you have a right to your own bank statements. However, what happens if the spouse of the Claimant potentially has bank statements that could influence the case? That was a point considered by Knowles J in the High Court appeal of Morgan-Rowe v Woodgate [2023] ALL ER (D) 02 (Oct).
The first instance decision was considered by a Recorder who determined that liability should be at 50% due to the Claimant’s contributory negligence, but the real battleground was the credit hire being claimed by the Claimant. The Recorder found that the Claimant was impecunious based on the financial evidence given by the Claimant and relied on in support of the assertion that she was impecunious.
The Defendant appealed to the High Court because they were of the view (amongst other arguments on the issue) that the claimant had failed to disclose all financial records and therefore should be barred from being able to rely on impecuniosity. The argument centred on bank accounts believed to belong to the Claimant’s husband, revealed indirectly through a transaction on a joint HSBC account. The Defendant argued that there must have been other accounts and credit cards, that these statements should have been disclosed, and that failure to do so meant the Claimant should be considered poor.
The Recorder had found that the accounts in question were in the husband’s sole name and when considering CPR 31.8, could not make the finding that there was a failure to disclose.
Knowles J did not disturb the Recorder’s findings. He said there was no evidence that the Claimant possessed her husband’s bank statements, had any legal right to them, or had the right to inspect or copy them, meaning none of the requirements of CPR 31.8(2) were met. Knowles J explained that a married couple with separate bank accounts do not automatically control each other’s financial records. Therefore, the husband’s statements were not within the claimant’s control, were not part of standard disclosure, and there was no breach of the disclosure order.
Is the right to possession, inspect or take copies a straightforward question?
No, it is not. Courts don’t apply CPR 31.8 only to whether there’s a strict legal right. They look at the true relationship between the litigant and the third party with the documents. Even if there’s no formal legal right to possess them, documents may still be considered within a party’s control if the relationship suggests they can access them.
In the case of North Shore Ventures Limited v Anstead Holdings Inc [2012] ALL ER (D) 89 (Jan) the Claimant had a US$35 million after securing a Judgment against the Defendants. After the judgment, the Defendants put assets into family trusts, where they and their families were beneficiaries. The Claimant suspected the trusts were used to hide assets and prevent enforcement. It asked for a Court order to see trust documents, even though the trustees held them. The Defendants claimed they did not have the documents and had no legal right to access them, so they were not in their “control” under CPR 31.8. The Defendants appealed the order.
The Court of Appeal was asked to consider whether documents held by third-party trustees could nevertheless be treated as being in the Defendants’ “control” for the purposes of CPR 31.8. The Court of Appeal dismissed the appeal.
They confirmed that CPR 31.8 is not limited to strict legal rights. When documents are held by a third party, the Court looks at the true relationship between the litigant and the holder. Even without a legal right, documents may still be under a party’s control if, in practice, the third party acts on their instructions or there’s an understanding that documents will be provided on request.
The Court said it can find documents within a party’s control based on the situation, not just law. In this case, the Judge believed the trusts were set up to protect assets and that the trustees weren’t acting independently. They followed the defendants’ requests. This meant the documents held by the trustees were considered controlled by the defendants because they created the trusts, their families benefit, and the setup looked like an attempt to avoid enforcement. The court inferred strong practical control.
A document can be in a party’s control if they can realistically get it, the holder usually acts on their wishes, or there’s an informal understanding for access. A strict legal right is not necessary.
This Contrasts with Morgan-Rowe, where the court found that the husband’s bank accounts were genuinely independent and there was no evidence of control. Whereas in North Shore the trustees followed the Defendants’ instructions.
Third parties and third-party applications.
In Morgan-Rowe, the Recorder highlighted that it was open to the Defendant to make a third-party application under CPR 31.17. The test is substantially higher than that for a pre-action disclosure application. Under CPR 31.17 the applicant must show:-
- That the documents are likely to either support or adversely affected the case, and
- It must be necessary to fairly dispose of the claim or safe costs
Once the applicant gets over that high threshold, the Court then has the discretion to balance the factors to consider whether to exercise its power to order a third party who is not a part of the proceedings to disclose.
Further, as with PAD applications, the presumption is the applicant will pay the Third Party’s costs of complying with the Order and the application itself (although, as per CPR 46.1, the Court can consider making a different Order when considering the reasonableness of opposing the application).
In April 2026, CPR 31 is going to be amended to include the following:-
31.12A. The court may order a party to request any person to produce for disclosure and inspection any document which may support the case or adversely affect the case of any party to the proceedings
This will not force a third party to disclose documents, but it ensures that parties have asked third parties for relevant documents. I am uncertain whether this would require a party to sign a statement of truth explaining their efforts to obtain the evidence or whether it would significantly affect the likelihood of a third-party disclosure application and the 31.17.
Concluding remarks.
Disclosure held by a third party is not a new principle. It’s been relevant for many years and the mechanisms have been widely available to parties where it is necessary. However, it doesn’t always mean it can be utilised.
Even if Knowles J found that CPR 31.8 could mean the Claimant had failed to comply with the credit hire debaring Order in Morgan-Rowe, would that mean that a spouse’s financial position is relevant to determining whether or not the Claimant was impecunious?
Third-party disclosure is a useful but controlled tool. The Courts won’t allow wide-ranging searches (amounting to fishing expeditions) but will intervene if outside documents are genuinely needed to resolve issues.
Whether through CPR 31.17 applications or by viewing documents as within a party’s control under CPR 31.8, the emphasis will be on substance over form. Who actually has the evidence and who can access it? Practitioners should define requests only when the evidence is necessary and be ready to explain who owns the documents.
Whether CPR 31.12A’s introduction in April will assist this issue on standard disclosure is something that practitioners will no doubt find out.
Information
Alec Hancock is a practising Barrister at Magdalen Chambers in Exeter. For instructions on matters, please contact Magdalen Chambers via clerks@magdalenchambers.co.uk or by telephone on 01392 285 200.
