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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> British Sky Broadcasting Group Plc & Anor v Virgin Media Communications Ltd & Ors [2008] EWCA Civ 612 (06 June 2008) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2008/612.html Cite as: [2008] Bus LR 1543, [2008] Lloyd's Rep PN 17, [2008] WLR 2854, [2008] 1 WLR 2854, [2008] EWCA Civ 612, [2008] 4 All ER 1026, [2008] CP Rep 34 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Hon Mr Justice Lewison
HC07C00978
Strand, London, WC2A 2LL |
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B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE JACOB
and
THE RIGHT HONOURABLE LORD JUSTICE LLOYD
____________________
British Sky Broadcasting Group plc British Sky Broadcasting Limited |
Appellants |
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- and - |
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Virgin Media Communications Limited (formerly NTL Communications Limited) Virgin Media Television Limited (formerly Flextech Television Ltd Virgin Media Limited (formerly NTL Group Ltd) |
Respond-ents |
____________________
for the Appellants
Sir Sydney Kentridge QC and Gerard Rothschild (instructed by Messrs Ashurst LLP)
for the Respondents
Hearing date: 14 May 2008
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Crown Copyright ©
Lord Phillips of Worth Matravers LCJ:
This is the judgment of the Court.
Introduction.
i) 'The High Court Proceedings' : the Action in which this appeal is brought. It was commenced on 12 April 2007 when Virgin brought a claim alleging that Sky was abusing a dominant position contrary to Article 82 EC and section 18 of the Competition Act 1998. One issue in these proceedings is the motive for and the effect of the acquisition by Sky in November 2006 of a 17.9% shareholding in ITV.ii) 'The Ofcom Review': an investigation being carried out by Ofcom (the Office of Communications) into the Pay TV industry. This was initiated pursuant to a request made on 16 January 2007 by Virgin and three other pay TV operators. They have alleged anti-competitive behaviour by Sky. Ofcom is carrying out a consultation in relation to these allegations, and in particular to the allegations made by Virgin in the High Court Proceedings, and may decide to make a market investigation reference to the Competition Commission ('CC').
iii) 'The CAT Proceedings': The CC investigated the acquisition by Sky of the 17.9% interest in ITV and made a Report. In accordance with recommendations in that Report the Secretary of State for Business, Enterprise and Regulatory Reform decided to impose a partial divestment of Sky's shareholding to a level below 7.5%. Both Sky and Virgin have, pursuant to section 120 of the Enterprise Act 2002, each made an application for a review of the CC's Report and the Secretary of State's decision. Each has been granted permission to intervene in the other's application. Sky is contending that the requirement that it be divested of part of its shareholding in ITV is unjustified. Virgin is contending that the divestment should be total.
"(1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where-
(a) the document has been read to or by the court, or referred to, at a hearing which has been held in public;(b) the court gives permission; or(c) the party who disclosed the document and the person to whom the document belongs agree."
Many of the disclosed documents are, however, of such commercial sensitivity ('the sensitive documents') that the parties have agreed to put in place exceptional measures of a kind now well established where disclosure of commercial secrets is concerned. Disclosure of the sensitive documents will be restricted to identified external legal advisers who will give express undertakings not to disclose them or their contents to anyone, including their own clients, and only to use them for the purpose of the High Court Proceedings. It has been implicit in the argument of counsel for both parties that these undertakings will be subject to the power of the court to give permission for a document, or the information in it, to be used for a purpose other than that for which it was disclosed, in accordance with CPR 31.22(1)(b).
The implications of the order sought
The judgment
Sky's submissions
"The principle was stated in a work of the highest authority 93 years ago by Bray J., Bray on Discovery, 1st ed. (1885), p.238:
'A party who has obtained access to his adversary's documents under an order for production has no right to make their contents public or communicated them to any stranger to the suit:…nor to use them or copies of them for any collateral object… If necessary an undertaking to that effect will be made a condition of granting an order:…'
Since that time such an undertaking has always been implied, as Jenkins J. said in Alterskye v. Scott [1948] 1 All E.R. 469, 471. A party who seeks discovery of documents gets it on condition that he will make use of them only for the purposes of that action, and no other purpose."
"There may be cases in which a plaintiff would be justified in bringing an action on a document disclosed in an earlier action. I do not say that it could never be done without abusing the process of the court. But generally speaking it would be an abuse of its process and in the circumstances of this case the plaintiff's use of this memorandum is an improper use which the court should not countenance."
"In my opinion it is highly desirable that there should be no discouragement to full and frank disclosure on discovery. If there be a risk that disclosures may produce new causes of action parties may be deterred from disclosing the document."
"The implied obligation not to make improper use of discovered documents is, however, independent of any obligation existing under the general law relating to confidentiality. It affords a particular protection accorded in the interests of the proper administration of justice. It is owed not to the owner of the documents but to the court, and the function of the court in seeing that the obligation is observed is directed to the maintenance of those interests, and not to the enforcement of the law relating to confidentiality."
"We turn now to another proposition advanced on behalf of the respondent. Counsel formulated the implied undertaking as follows: not without leave of the court or the other party to use the other party's documents as disclosed on discovery for any purpose other than the immediate purposes of the action for which they have been disclosed. We feel some difficulty about the words we have italicised. If the undertaking is to the court (as it is common ground it is) the other party cannot arrogate the power to release (and yet it is conceded that such other party may waive what would be a 'civil' contempt). On the other hand, how can the court fairly relieve from the undertaking if the party making discovery did so in reliance that the document would only be used for the purpose of litigation?"
"…the implied undertaking applies not merely to the documents discovered themselves but also to information derived from those documents whether it be embodied in a copy or stored in the mind. But the implied undertaking is one which is given to the court ordering discovery and it is clear and is not disputed by the appellants that it can, in appropriate circumstances, be released or modified by the court."
"The extent of the solicitor's duty
Whether founded on contract or equity, the duty to preserve confidentiality is unqualified. It is a duty to keep the information confidential not merely to take all reasonable steps to do so. Moreover, it is not merely a duty not to communicate the information to a third party. It is a duty not to misuse it, that is to say, without the consent of the former client to make any use of it or to cause any use to be made of it by others otherwise than for his benefit. The former client cannot be protected completely from accidental or inadvertent disclosure. But he is entitled to prevent his former solicitor from exposing him to any avoidable risk; and this includes the increased risk of the use of the information to his prejudice arising from the acceptance of instructions to act for another client with an adverse interest in a matter to which the information is or may be relevant."
Mr Glick submitted that these words were equally applicable in the present context.
"Certainly a party seeking the exclusion of the other side's legal adviser must first show that there is an appearance of risk, going beyond the remote or merely fanciful, of conscious or unconscious use or disclosure by the lawyer of something relevant to the current dispute of which the lawyer gained knowledge as a result of participation in an earlier mediation. But if that threshold is reached, it is then for the lawyer to demonstrate that in fact no such risks exists or that, if it does, no damage, other than de minimis, could possibly result from use or disclosure."
Mr Glick submitted that this passage could properly be applied to the facts of the present case.
Virgin's submissions
Discussion
"Solicitor and client privilege is one of the basic principles which permit the operation of our justice system and public confidence in it. In order to support the public interest in the inviolability of the solicitor and client relationship the courts have imposed great inconvenience and have overridden without question personal rights such as the right of a person to choose his own counsel. In this case there is no suggestion that a lawyer who once acted for the defendant is now with the plaintiffs' firm. There is no suggestion of a solicitor and client relationship having been established between the defendants and anyone at Gowling's. The public interest in solicitor and client relationship is not engaged.
In my view the implied undertaking would be most impractical if it resulted in an ability to remove from a case any solicitor who was bound by an implied undertaking. The implied undertaking is not of sufficient public interest when balanced against the right of a party to choose his own solicitors and the public interest in the efficient administration of justice to require the court to disqualify any solicitor who might wrongly deploy information subject to the undertaking. If a solicitor fails to observe the undertaking the remedy is to cite him for contempt, not to remove him.
A lawyer who takes cases regularly must have acquired a great deal of information subject to implied undertakings. In these days of specialized education and long work hours for junior lawyers, it is possible that a significant percentage of a lawyer's general knowledge will have been acquired in his practice of law, there having been little other opportunity for him to acquire the same. It is equally possible that a large portion of that general knowledge will be subject to implied undertakings. If the defendant's submissions are correct, few lawyers who have been called for any length of time will be able to take part in litigation. It is to be remembered that the undertaking is to the Court and is not limited to deploying information in cases involving one or more of the same parties."
We endorse those observations.