PHONES 4U V DEUTSCHE TELECOM & ORS  EWCA CIV 116;
PIPIA V BGEO GROUP LTD  EWHC 86 (COMM)
When a claim includes allegations of fraud, conspiracy or collusion or some other activity that may motivate people to avoid using normal channels which may be monitored or recorded, the claimant will be keen to see channels of communication where less guarded remarks may have been made, in a bid to avoid detection. Ideally they will want access to personal devices and messages sent and received using such devices (including personal emails and WhatsApp messages).
The extent to which the court can require disclosure of personal devices and/or their contents is addressed in two recent cases, in the Court of Appeal and the Commercial Court. These judgments are helpful to parties seeking such disclosure, but are also of some comfort to individuals being asked to disclose personal devices, or their contents, because they show that the court will have regard to their privacy rights. Ultimately, individuals are still free to refuse such requests for disclosure.
As lines between "work" and "personal" communications blur:
- Organisations should consider the extent to which they permit and or/restrict use of channels of communication where the data generated is outside of their direct control.
- Individuals who adopt alternative methods of communication should be aware that they may have to submit their personal devices and communications to review and disclose relevant documents.
Courts will continue to seek pragmatic solutions whilst striking a balance between ensuring relevant documents are made available to litigants and protecting the rights of individuals.
Court of Appeal - (Phones 4U v Deutsche Telecom & Ors [ 2021] EWCA Civ 116)
At the heart of this claim is an alleged arrangement (denied by all defendants) said to infringe competition law, and in respect of which Phones 4U seeks damages
The appellants were appealing against an order that they write to individuals, described as “Personal Material Custodians” (“Custodians”), to request them to give named e-disclosure providers access to their personal mobile telephones and emails. The expressed purpose was to enable a search for work-related communications relating to the employer’s business. The devices and emails were to be searched for material relevant to the dispute. Only that material was to be provided to the relevant defendant. Devices and emails were then to be returned to the Custodians, and any copies deleted or destroyed.
Documents in the "control" of the defendants
This was a competition claim with disclosure governed by CPR PD 31 C (not by the Disclosure Pilot for cases in the Business and Property Courts) Under CPR 31.8(1), a party’s duty to disclose documents is limited to documents which are or have been in their “control”. Under CPR Part 31.8(2), a party has, or has had, a document in their control if they have or had (b) a right to possession of it; or (c) a right to inspect or take copies of it. The parties both accepted that Phones 4U was seeking to obtain disclosure of only work-related emails and messages that were sent to or received by the Custodians on their personal devices, and that any such emails and messages are to be regarded in English law as being in the relevant defendant’s control for the purposes of CPR Part 31.8, whether the Custodians were current or ex-employees.
KEY LEGAL POINTS
Did the court have jurisdiction over the personal devices in the context of this dispute?
It was assumed that the personal devices themselves were not in the control of the defendants, so that issue was not aired before the Court of Appeal. In an important passage of the unanimous judgment, of application to all cases, the Master of the Rolls noted that:
"disclosure is an essentially pragmatic process aimed at ensuring that, so far as possible, the relevant documents are placed before the court at trial to enable it to make just and fair decisions on the issues between the parties. CPR Part 31 is expressly written in broad terms so as to allow the court maximum latitude to achieve this objective. It is not a straitjacket intended to create an obstacle course for parties seeking reasonable disclosure of relevant documents within the control of the other party."
He noted that the judge had sought to avoid cost and delay and multiple applications (for example for non- party disclosure from the employees) in several stages. The Master of the Rolls further noted:
"CPR Part 31.5 explains how the process of disclosure is to be undertaken. It allows the court to give directions at any point “as to how disclosure is to be given”. The judge’s order was, jurisdictionally, precisely within the terms of CPR Part 31.5(8) providing for “how” disclosure was to be given in this case. It explained what searches were to be undertaken. It said “where” the searches were to be made, namely in the documents controlled by the defendants but in the hands of custodians. It said “what” was to be searched for, and “in respect of which time periods”. It said “by whom” those searches were to be made, namely the defendants and their IT consultants.”
Was the order proportionate?
The appellants made four specific criticisms, each of which were rejected by the Court of Appeal:
1. It was unnecessary to involve a third party (i.e. the defendants should have been left to try to recover the documents from the Custodians). The court rejected that argument, noting that in their judgment the only way to short circuit satellite litigation was to involve third parties in the review of the documents.
2. E-disclosure providers were not an appropriate third party (i.e. if a third party should be interposed, it should be a firm of independent solicitors). Taking into account the seniority of the Custodians (they were senior executives who could take independent legal advice), that at least some of them had chosen to use their personal devices for work purposes, and the undertakings given by e-disclosure providers, the court held that the judge's decision to involve the providers could not be said to have been obviously wrong, disproportionate or unreasonable.
3. The voluntary nature of the order – The voluntary nature of the order was criticised mainly on the basis of Lord Diplock’s suggestion in Lonrho v. Shell that the court cannot ask a party to do voluntarily what it could not be ordered to do. Having accepted that the judge had jurisdiction to make the order made, the court rejected that argument. The court considered that the order made was "pragmatic and sensible". They also rejected the argument that the Custodians should have been told that they were allowed to take legal advice as to the effect of the order.
4. Protection for the privacy rights of the Custodians, their family, friends and contacts – the court rejected the appellants' arguments that the order failed to take into account such rights. It was designed to protect them. It was commented that the order would have been better if it had given the Custodians, and others affected, liberty to apply to the court.
It was also argued that the order violated data protection law. However, Vodafone's counsel acknowledged that these concerns would be satisfied if (1) it was made clear to the Custodians that the process was voluntary and (2) an independent solicitor undertook the sifting process. The Court also noted that any data processing pursuant to the order would be with the consent of the data subject and would be necessary for the provider as data controller to undertake "for compliance with a legal obligation to which the controller is subject" under 6.1(c).
Clarification of rules under the Disclosure Pilot (Pipia v BGEO Group Ltd  EWHC 86 (Comm))
Meanwhile, in a judgment handed down in January 2021, the Commercial Court reached a similar conclusion under the Business and Property Courts' Disclosure Pilot Scheme holding that communications on a personal smartphone of a witness (the defendant's former CEO) were in the control of the defendant company. Their disclosure was necessary for the just disposal of proceedings, because the former CEO owed fiduciary duties to the defendant. The court refused however, to order disclosure of communications on a personal smartphone of a lawyer who was employed by another company in the defendant's group and owed no fiduciary duties to the defendant.