"The Rules require each party to provide the other parties with "a list of the documents which are or have been in his or her possession, custody or power relating to any matter in question in the cause or matter""
"Moreover, the parties to litigation are under an obligation to preserve all relevant documents. It is not legitimate, once litigation is either instituted or contemplated, for a party or potential party to destroy documents, whether deliberately or inadvertently."

The discovery process in Jersey litigation

31 Aug 2012

In any litigation, documents are likely to feature as evidence.  Those documents may be significant in their own right or may be crucial in refreshing the memories of witnesses. Discovery is the legal process pursuant to which the parties to litigation reveal their documentary evidence to each other.  The purpose of this briefing is to consider in general terms what falls within the definition of "documents", what documents need to be disclosed, what documents can be withheld legitimately, and how to approach the task.

Documents
The term "documents" is not restricted to paper material.  It extends to anything upon which information may be recorded in an intelligible manner, or may be capable of being made intelligible by the use of equipment . In real terms, this would include tape recordings, microfilm, microfiche, computer records, computer files (including voicemails, scanned images and facsimiles), texts and images.

In the case of electronic documents (such as e-mails, word processed documents, voicemails, scanned images, facsimiles, texts and images), it should not be assumed that production of a hard copy represents production of a document itself.  Quite often, computer created documents contain "metadata" which can provide far more information than the hard copy.  This electronic data itself may be relevant.  Whilst considering the extent and parameters of a disclosure exercise, particularly in the context of electronic data, parties must be aware of and consider the extent of the 'document universe', (i.e. the servers and locations where relevant data and documents could be stored, including backup tapes and disaster recovery sites).

Discovery
In relation to litigation in Jersey, the Royal Court Rules 2004 (the "Rules"), specify the documents a party must disclose to the other parties.  The Rules require each party to provide the other parties with "a list of the documents which are or have been in his or her possession, custody or power relating to any matter in question in the cause or matter".

Initially, a party to litigation will have to produce a list of documents in accordance with the Rules, and then swear an affidavit verifying that the list of documents is complete and accurate.  Thereafter, a party will have to provide copies of all those documents to the other parties to the litigation.  In the event that documents have been or may have been omitted, applications can be made for discovery of specific documents or classes of documents.

The obligation to give discovery is a continuing obligation.  If relevant documents come to light in the course of proceedings or after a list of documents has been produced, those documents must be disclosed by way of a supplemental list.

The obligation is very wide.  As the Rules currently stand, it is an absolute obligation.  There is no limit to the search which a party ought to carry out to find what documents it has (or had) in its possession, custody or power.  The obligation is to identify all documents which are or were in its possession, custody or power.  This obligation runs not just to originals but also to copies of documents.

Documents in the "possession" of a party are those which it physically holds (in paper or electronic format).  Those in its "custody" are those which is it is holding for another. Documents in its "power" are those which the party has a right to obtain from the person holding them.

The obligation only relates, however, to documents which relate to "any matter in question" in the proceedings.  This means documents that it is reasonable to suppose contain, or may contain, information which may enable either party to advance its own case or to damage that of its opponent.  The key question is whether the document could reasonably be expected to lead to a line of enquiry which would be of assistance to a party in relation to the matters in dispute.  The issues between the parties to litigation should be identified by the content of the pleadings. 

The obligation extends not only to identifying those documents which are currently in the possession, custody or power of the party, but also to those which have been in the possession, custody or power of that party. Whilst this may simply relate to originals sent out, in the event that documents have been destroyed, specific consideration may need to be given to this aspect. 

Moreover, the parties to litigation are under an obligation to preserve all relevant documents.  It is not legitimate, once litigation is either instituted or contemplated, for a party or potential party to destroy documents, whether deliberately or inadvertently.  Accordingly, once litigation is contemplated, any routine document destruction policy should be held in abeyance until specific advice on this issue has been obtained. 

In the event that any litigation is instituted or contemplated, it may be appropriate to consider circulating an internal memorandum to all relevant staff in similar terms to the following:

"Litigation has been instituted in relation to [matter x].  As litigation is a possibility, we are obliged to preserve all documents relevant to any issue in that litigation.  The duty applies not only to paper documents but also to computer databases, electronic mail, tape recordings and electronic documents etc.. Relevant documents held by directors, employees, subsidiary companies and agents must also be preserved.

It is important that steps are taken to preserve the relevant documentation and ensure that any routine destruction of documents and deletion of tapes and computer records, including electronic mail (whether administered centrally or locally, including system back-ups), is stopped.

It is also important that the creation of new documents relating to the litigation is restricted lest it may prejudice our position. We must disclose all documents in our possession, custody or power relevant to the matters in dispute to the other side, even if they are harmful to our position.  Examples of documents that can cause problems include internal memoranda, e-mails, board minutes, management reports and correspondence with auditors or insurers.

Documents will not, however, have to be disclosed if they are "privileged".  The types of documents that are likely to be privileged at this stage are:

  • confidential communications between us and our legal advisers for the purpose of giving or receiving legal advice on what should prudently and sensibly be done in the relevant legal context; and
  • confidential documents produced for contemplated or pending legal proceedings provided that the sole or dominant purpose of such documents is to conduct the litigation.

We need to implement controls on the creation of new documents relevant to this litigation and take steps to ensure that documents are not circulated or copied unnecessarily such that they cease to be privileged or are susceptible to being disclosed inadvertently.

As an initial step, should you see or receive any documents headed "Privileged: Prepared for the Purposes of Legal Advice" in relation to this matter, please do not copy them or circulate them unless you are certain that this action is appropriate. In case of doubt, please speak to [insert appropriate person]."

Privilege
Although the obligation to give discovery appears to be absolute and couched in very wide terms, there are exceptions.  Broadly, there are two categories of documents which are protected by privilege and therefore not required to be produced to any of the other parties to the litigation, although they still need to be identified in general terms.

The first category concerns those documents subject to "litigation privilege".  This protects documentary communications between a client and its lawyer, and between one of them and a third party (for example, a potential witness of fact or expert opinion) providing that the document was created or brought into existence for the dominant purpose of obtaining or giving legal advice in relation to pending or contemplated litigation or collecting evidence for such litigation. "Litigation" means adversarial proceedings, usually before a court or in an arbitration, and there must be an actual or contemplated case upon which advice is being sought or given.  In Cafe De Lecq Limited v. R.A. Rossborough (Insurance Brokers) Limited [2011 JLR 182] the Court confirmed that litigation privilege applied to a document if litigation were reasonably in prospect or pending and the document was produced or brought into existence with the dominant purpose of its author (or the person under whose direction it was produced or brought into existence) of using it or its contents to obtain legal advice or to conduct or aid in the conduct of the litigation.

The second category concerns those documents subject to "legal advice privilege". This is potentially broader in scope as it does not depend on there being litigation pending or contemplated.  Any documentary communication between a client and lawyer made for the purposes of obtaining or giving legal advice will be privileged and thus may be protected from disclosure in future litigation which is not at that time pending or contemplated.  In the case of J. Cunningham v. A. Cunningham and Four Others [2010 JLR Note 24], it was held that legal professional privilege remained after the occasion for it had passed unless it was waived (once privileged, always privileged).

Although these principles may be stated simply, their application can be far from straightforward.  Indeed, in the Three Rivers District Council v. Governor and Company of the Bank of England (the "Three Rivers") litigation, the English Court of Appeal and the House of Lords have on various occasions considered the extent of legal advice privilege.  One of the key issues in upholding a claim for privilege concerns the identity of the "client" in relation to whom legal advice is being sought and whether this encompasses the whole organisation (such as a trust company) or merely specific parts of it (such as the compliance department).  In the Three Rivers litigation, the English Court of Appeal took a narrow view of who or what constituted a "client".  The Court of Appeal decided that in the case of a large organisation, the client was not the organisation as a whole but, rather, the specific unit or department within that organisation actually instructing the lawyers. Memoranda, communications or documents prepared outside that specific department were not covered by privilege and, therefore, would be discoverable. 

These decisions are likely to be highly persuasive in Jersey and, accordingly, consideration needs to be given at a very early stage as to how potentially litigious matters will be dealt with and as to who exactly will comprise the "client" in the event that instructions are required to go to lawyers.