Posts Tagged Discovery
Glaxo Welcome v Sandoz et al  EWHC 3229 (Ch), puts the spotlight on an important part of international forum shopping, namely discovery /disclosure, in particular collateral use of document obtained in one jurisdiction, in litigation in another. What is fundamentally at stake is that the launch of proceedings in a discovery friendly jurisdiction, may be simply employed as a jack for obtaining evidence to be used in a discovery-heavy jurisdiction. (A few months back the principles were also applied in Buzzfeed v Gubarev  EWHC 1201 (QB)
Claimants apply for an order permitting the second claimant to use certain documents disclosed by some of the defendants (“the Sandoz Defendants”) in the claim in the English courts, in a claim in Belgium between the second claimant and Sandoz NV (“Sandoz Belgium”). The two claims are part of global litigation between members of the GlaxoSmithKline and Sandoz groups of companies. In Europe there are claims in several jurisdictions including England and Wales, The Republic of Ireland, Germany, The Netherlands and Belgium. The disclosure exercise between the claimants and the Sandoz Defendants has been very substantial. It involved the Sandoz Defendants reviewing 406,300 documents using 50 legally qualified reviewers. This led to the subsequent disclosure of slightly in excess of 75,000 documents to the claimants.
As Marsh CM notes at 11, ‘There is a marked contrast in the manner in which litigation is conducted in England and Wales on the one hand and Belgium (and most other Civil law countries) on the other hand. In England and Wales, the ability to obtain disclosure that is adverse to the other party’s claim is an important feature of litigation. However, the evidence provided in connection with the application shows that disclosure is only available in a very limited form in Belgium. One of the issues to be determined is whether disclosure obtained in this jurisdiction should be made available to a party that is engaged in litigation in a jurisdiction where disclosure, if not unknown, is very limited in scope.’
He is of course spot on: obtaining relevant documentation from the other party is not easily done in Belgium (and elsewhere) and often needs to be deduced from final filings of submissions or indeed at the hearing stage.
Relevant authority is discussed at 22 ff., and is really quite relevant: the discussion shows among others great consideration of rule of law concerns, mutual trust between EU Member States and Council of Europe parties, and the relevance of applicable law in the assessment (at 22(5): ‘The Belgian Claim proceeds under harmonised EU law as set out in the Trade Mark Directive. It follows that the English court is in a better position to consider initial relevance of the documents to the issues in the Belgian Claim than would be the case were the claim to be one brought under domestic Belgian law’).’
Final conclusion is in favour of collateral use of a substantial amount of documents. It is worth copying Marsh CM’s reasons in full: at 60:
(1) The parties to this claim, and associated companies, are engaged in litigation on a very wide scale in many jurisdictions. They are part of very substantial businesses with equal resources. There is no suggestion that the application is oppressive.
(2) Although the legal basis for this claim and the Belgian Claim are markedly different, there are similarities between some of the issues that are engaged.
(3) The claimants have been able to satisfy the court that the majority of the documents they seek to use are likely to be relevant to the Belgian Claim. The interests of justice would therefore militate in favour of the claimants having an opportunity to obtain advice about their use in the Belgian Claim.
(4) Use of the documents to enable the second claimant to consider whether, having obtained advice, a claim against additional parties should be pursued is, to my mind, more compelling than use of documents in connection with the Belgian Claim. There are no risks of adversely affecting the existing proceedings. The court should be slow to stand in the way of a party who wishes to obtain advice about pursuing a lawful course of action.
(5) There is now an agreed procedure for the orderly progress of the appeal in Brussels with the second claimant filing an additional brief followed by Sandoz Belgium. The disruption, if any, by the introduction of additional documents has been minimised.
(6) The number of documents the claimants seek to use is relatively small. Those that may be used in the Belgian Claim are not disproportionate in volume to what is at stake in those proceedings. There is no real danger that the Belgian Claim will be overwhelmed with additional documents even if all of them are deployed and Sandoz Belgium considers it is necessary to file additional documents to counter documents having been ‘cherry picked’ by the claimants.
(7) The difference of approach between litigation in England and Belgium is a factor, but one of limited weight. There is no suggestion that the use of documents obtained in disclosure is an abuse of this court’s process. The risk of the Belgian Court’s process being subverted by the introduction of disclosure documents is marginal, particularly bearing in mind the involvement of the Belgian lawyers and the procedure that has been agreed.
(8) I accept Mr Hickman’s submission in relation to the documents exhibited to Morris 7. The documents that are exhibited were extensively discussed in the witness statement which was read by the Deputy Judge. Although the claimants do not make an application for a declaration that they are permitted to use those documents as of right, the documents have been legitimately deployed for the purposes of an application heard in open court (subject only to the pro tem confidentiality order).
(9) It is not open to the Sandoz Defendants to say, and they have not submitted, that if the order permitting use of the documents is made, their position in the Belgian Claim is prejudiced, in the sense that the likelihood of them successfully prosecuting the claim and/or defending the counterclaim is reduced. The interests of justice require that material which is likely to be relevant should be permitted for proper purposes. A reduction in their prospects of success is an immaterial consideration in their favour and, if anything, it weighs in the balance in favour of the claimant.
Is the end of discovery in Ireland nigh? The Irish Court of Appeal is very critical in Tobin v MOD. (And Hogan J reminds us of great potential for PhDs).
Given that discovery plays an important factor in forum shopping, Hogan J’s very critical comments on the extensive possibilities in Ireland are quite relevant. Arthur Cox have good analysis of  IECA 230 Tobin v MOD here and I am in general happy to refer. Those of you interested in comparative litigation really should take a moment to read the Judge’s comments in full. Yet again, it seems to me, a topic for serious PhD (in comparative civil procedure) analysis.
In Platinum Partners, Chapman J held that foreign discovery laws should be considered for comity concerns, yet they are not determinative of whether discovery should be permitted under United States law.
Foreign Representatives sought access to documents from US audit firms concerning investment funds that were debtors in Cayman Islands liquidation proceedings recognized under Chapter 15 as foreign main proceedings. Jacob Frumkin has excellent insight and I am happy to refer.
Section 1521(a) of the Bankruptcy Code provides that, upon recognition of a foreign main proceeding, a bankruptcy court may, “at the request of a foreign representative, grant any appropriate relief” … “where necessary to effectuate the purpose of [chapter 15] and to protect the assets of the debtor or the interests of the creditors.” The first main argument of the auditors was that Cayman law does not permit the discovery of audit work papers or materials that are not a debtor’s property and, if the Court were to grant the motion, its interests and the interests of comity would not be protected.
The Court dismissed this argument, noting that
“it is well-established that comity does not require that the relief available in the United States be identical to the relief sought in the foreign bankruptcy proceeding; it is sufficient if the result is comparable and that the foreign laws are not repugnant to our laws and policies.” and that
“requiring this Court to ensure compliance with foreign law prior to granting relief sought pursuant to chapter 15 would require the Court to engage in a full-blown analysis of foreign law each and every time a foreign representative seeks additional relief in the United States, which may result in differing interpretations of U.S. law depending on where the foreign main proceeding was pending.”
Comity considerations surface in the most technical of corners.