Important pre-action disclosure application – Diamond Bus Limited v Transport for West Midlands

18 August 2023

A new and important decision of the Circuit Commercial Court sitting in Manchester has reviewed and re-affirmed the principles upon which a court should apply its discretion in determining whether to order pre-action disclosure under CPR 31.16.

Counsel and instructing solicitors

Stephen Connolly of Exchange Chambers, instructed by Libby Pritchard of Backhouse Jones, acted for the successful Applicant, Diamond Bus Limited (Diamond).

Background

In Diamond Bus Limited v Transport for West Midlands, Diamond, a bus company operating across the West Midlands, sought pre-action disclosure of aggregated passenger data from Transport for West Midlands (TfWM) in relation to a prospective claim of over £1 million for historic under reimbursement.

The application arose out of a concessionary bus travel scheme, which it was alleged by Diamond did not meet its stated aim of leaving bus operators “no better or worse off” financially from their participation.  It was claimed by Diamond that disclosure of anonymised local passenger data held exclusively by TfWM would allow it to produce an accurate “look-up table” representative of local passenger typicality, which would allow it to reliably quantify its foregone fares under the scheme, and that, in any event, the court should exercise its discretion in ordering disclosure, as it would assist the fair disposal of the matter, whether by limiting the issues in dispute between the parties or by removing the need for substantive proceedings to be issued.

Pre-action disclosure of the data was opposed by TfWM on the basis that the circumstances of the present case did not satisfy the necessary jurisdictional thresholds under CPR 31.16, and that the Court ought not to exercise its discretion in any event owing to several factors, including that (1) Diamond was already in a position to plead its claim, and was simply “fishing” to improve its claim without particularity as to the classes of disclosure sought; (2) the parties had previously agreed to resolve disputes by expert determination under a dispute resolution procedure within the scheme regulations and the Court should leave the parties to resolve their dispute through that procedure;  (3)  the disclosure sought involved the dissemination of commercially sensitive, third party data which might be used for collateral purposes; (4) those third parties were not a party to the application and TfWM was not in a position to consent to such disclosure without their agreement; and (5) there had been some delay by Diamond in bringing the application.

Decision

Finding in favour of Diamond, HHJ Cawson KC, sitting as a judge of the High Court, determined that the jurisdictional threshold under CPR 31.16(3) had been satisfied, and that taking a “big picture view”, the discretionary considerations weighed significantly in favour of granting the relief sought.

On the jurisdictional threshold, it was accepted by both parties that the “real battleground” was CPR 31.16(3)(d): whether disclosure before the commencement of proceedings was desirable in order to (i) dispose fairly of the anticipated proceedings; (ii) assist the dispute to be resolved without substantive proceedings; or (iii) save costs.

HHJ Cawson KC was satisfied that the provision of the data would give rise to at least a real prospect of either party’s approach to reimbursement being vindicated, which would in turn narrow the differences between the parties and assist in the resolution of the dispute without proceedings or saving costs, satisfying thresholds (ii) and (iii). Additionally, and though it was not strictly necessary for the purposes of his decision, the Judge also found that while Diamond had provided draft Particulars of Claim to TfWM as early as April 2021, those Particulars were in general terms and the provision of the data would allow Diamond to better formulate the claim and assess its merits, satisfying threshold (i).

As to the exercise of the Court’s discretion, the Judge determined that:

• the dispute resolution clause was more than merely permissive but absent any rules for the determination of the dispute within an expert determination, it lacked determinative consequences (cf. Taylor Wimpey UK Ltd v Harron Homes Ltd [2020] EWHC 1190 (TCC)) and did not weigh significantly in the learned Judge’s exercise of discretion.
• the Judge was doubtful as to whether Diamond could obtain collateral benefit from the data sought but even if that were wrong, a “confidentiality club” of Diamond’s experts and lawyers could be established by which there would be no need for Diamond itself to access the data. On that basis, the Judge was not persuaded that confidentiality concerns mitigated against granting pre-action disclosure.
• The judge had regard to the effect of the Coronavirus pandemic on the dispute as well as other significant litigation in which Diamond was involved in and found that delay was not a factor that ought to weigh heavily against ordering relief.
• The Judge found that, although it was unfortunate that Diamond’s expert had not given evidence on the disclosure sought, a cogent explanation had been provided in witness evidence of Diamond as to why that data was required and there was nothing to persuade the Court that what was sought was too widely drafted.

Context of the decision

The judgment of HHJ Cawson KC represents a rare decision of a Judge sitting at High Court level (Circuit Commercial Court) on the often overlooked issue of pre-action disclosure applications (which as noted by the Judge, practitioners “almost invariably advised against”) and has re-affirmed the principles to be applied by the court in exercising its discretion to make such an order. It is clear that, while such an application is “unusual”, it is not exceptional and is available to a prospective litigant where it can show that circumstances are out of “the usual run of things” and to do so would assist the dispute to save costs, resolve the matter without proceedings or, failing that, assisting the court in the fair disposal of the matter.

Judgment

The case was heard in the Business and Property Courts at Manchester (Circuit Commercial Court). The neutral citation for the decision is [2023] EWHC 2099 (Comm).

A copy of the judgment can be found here. Any further information on any litigation matter can be provided by our dispute resolution team here.