Irrelevant to any issue in the proceedings? High Court orders complete re-review of party's redactions under disclosure pilot scheme

In JSC Commercial Bank Privatbank v Kolomoisky and other¹ the English court determined that, having adopted an unduly narrow approach to relevance, the first defendant should conduct a complete re-review of each of over 6,000 WhatsApp messages in order to determine whether the redactions that had been applied could be maintained, and to provide further information about each redacted message.

The key point highlighted in this judgment is that, once a document has been identified as relevant to an Issue for Disclosure such that it falls to be disclosed, that document can only be redacted where the material in question is irrelevant to any issue in the proceedings. Where material is irrelevant to an Issue for Disclosure, but relevant to a wider issue in the proceedings, that material cannot be redacted on the basis of irrelevance under paragraph 16.1(1) of CPR PD51U.

Facts

This judgment is the latest decision handed down by the English court in long running Commercial Court proceedings pursued by the Ukranian state owned Privatbank against its former owners. By way of very brief summary, the underlying dispute concerns allegations by Privatbank that 
its former owners (the first and second defendants) participated in a fraudulent scheme to misappropriate substantial sums from Privatbank.

In the course of these proceedings, a disclosure order was made by the English court attaching the disclosure review document setting out details of the Issues for Disclosure and the models for disclosure to be applied. The Issues for Disclosure included (a) the control exercised by the first and second defendants over the claimant and (b) the first and second defendants' ownership and control of other entities relevant to the claimant's claim.

The first defendant duly provided disclosure, as part of which it disclosed ca. 6,209 WhatsApp messages. All but 272 of these messages had been redacted in whole or in part, with the first defendant's advisers providing a high-level explanation that these redactions fell within paragraph 16.1(1) of CPR PD51U, which allows a party to redact material which is both "irrelevant to any issue in the proceedings" and confidential. No specific explanation was provided giving more detail of the basis for the redactions applied to individual messages and, in a number of cases, it was not possible to identify the counterparty to the WhatsApp message in question.

Following the first defendant's disclosure of these redacted WhatsApp messages, there was protracted correspondence in which the claimant sought a fuller explanation for the redactions and pushed for additional disclosure. Ultimately, the first defendant agreed to remove redactions from 150 messages and provided these to the claimant in unredacted form. By way of explanation for this further disclosure, the first defendant's advisers conceded that, following its re-review, it was "at least arguable that [the 150 messages] may have been relevant to the issues for disclosure" but stated that the first defendant considered that they were unlikely to be of any particular significance to the issues in dispute.

The Claimant subsequently made an application under paragraph 17 of CPR PD 51U arguing that there had been a failure adequately to comply with the original disclosure order. 

Findings: the material must be irrelevant to "any issue in the proceedings"

In granting the claimant's application, the English court determined that the approach to relevance adopted by the first defendant when applying redactions had been too narrow.

Firstly, the first defendant's correspondence suggested that, when conducting the re-review which had resulted in a further 150 messages being disclosed in unredacted form, the first defendant's advisers had considered whether the redacted material was relevant to an Issue for Disclosure, rather than whether it was relevant more broadly to "any issue in the proceedings". This was the incorrect approach and, instead, when a document is relevant to an Issue for Disclosure, a redaction will only be appropriate where the redacted material is irrelevant to "any issue in the proceedings" (even if the material considered for redaction is not itself relevant to an Issue for Disclosure).

Second, the first defendant had taken an unduly narrow view as to what might be relevant to any issue in the proceedings. While much of the redacted material was said to involve unrelated commercial transactions and other commercial information about matters not forming the subject matter of the proceedings, the court agreed with the claimant that this information might still be relevant to the issues in the proceedings. In particular, it was likely that at least some of the redacted material might be relevant to issues regarding the level of control which the first and second defendant had exercised over the claimant and other entities e.g. showing the way in which the first and second defendant worked together and operated their jointly controlled assets. The fact that the commercial transactions covered by the redactions were not the transactions which the proceedings directly concerned did not mean that they were automatically irrelevant to any issue in the proceedings.

Having concluded that the first defendant had adopted an unduly narrow approach, the English court then had to determine what relief was appropriate to remedy the situation. The claimant invited the court to order that the first defendant should disclose certain specified chains of WhatsApp messages in unredacted form or, alternatively, suggested that the first defendant could allow the messages in question to be inspected by either the court or members of the claimant's legal team, who would be made subject to a confidentiality club. The English court considered that, having regard to all the circumstances of the case, neither of those options was appropriate. Instead, the court made an order requiring the first defendant and its legal advisers to conduct a full re-review of the redactions applied to all of the ca. 6,209 WhatsApp messages, stating that it anticipated that the first defendant would now disclose many more documents on the basis of the guidance provided by the court regarding the correct approach to relevance. In addition, the court directed that a schedule should be prepared covering any redactions maintained by the first defendant following its re-review, detailing the parties, the time and date of the relevant message and providing a generic description of its subject matter.

Comment

While the court's decision was perhaps unsurprising, it does highlight the important distinction to be drawn when applying redactions between Issues for Disclosure and "any issue in the proceedings" and represents a salutary reminder of the potential consequences of adopting an overly narrow approach to extended disclosure under the Disclosure Pilot. It also provides a useful overview of the court's expectations regarding the level of detail a party should give when explaining the basis upon which redactions should be applied, clarifying that a generic statement that the redacted material is irrelevant and confidential may well be insufficient.

¹ [2022] EWHC 868 (Ch)