Getting Discovery Right

A recent decision relating to errors made in a discovery exercise regarding, amongst other things, the inclusion of privileged materials, identifies how the courts consider waiver of privilege claims. Our Commercial Disputes team explores the rationale for the ruling and explains why it highlights the importance of getting discovery right to avoid substantial costs and delay.

In a recent case, the High Court considered a contested application by a defendant for orders relating to documents, including privileged documents, inadvertently disclosed by it following discovery agreed between the parties[1]. The privilege asserted was upheld by the judge but the motion incurred costs and delayed the underlying proceedings by two years[2]. The decision is a salutary lesson about ensuring the discovery production conforms with the discovery affidavit schedules, and ensuring any issues are addressed clearly and without unnecessary delay.

The decision

The proceedings related to a dispute about the ownership of a valuable US patent and arose out of a settlement reached between some of the parties in earlier proceedings. Material listed in the discovery affidavit over which privilege was asserted had been inadvertently disclosed on a USB. The disclosure also included other material not listed in the discovery affidavit, some of which was claimed to be privileged, but all of which was asserted to be outside the scope of the agreed categories and therefore irrelevant. The defendant sought orders:

• Confirming the privileged status of the material asserted as such, and
• Restraining use of the material involved which certain of the respondents had retained

Although the disclosure was clearly a mistake, it had in fact been included on the USB so the court had to consider a number of issues.

• Did the disclosure of the material itself constitute a waiver of any privilege that may have applied to it? Applying the relevant test[3], and on the facts, there was a “manifest inconsistency” between the documents discovered in the affidavit schedules and those on the USB. As a result, the court held that it was evident to the respondents’ solicitors that a mistake was made and, if necessary, it would have been obvious to a reasonable lawyer.
• Did failure to explain the mistake / formally claim privilege after being notified amount to a waiver of privilege? The court had “some hesitation” but was satisfied that the defendant’s lawyers’ conduct made clear that the defendant was not waiving privilege over the relevant material. This was mainly due to the fact that a replacement USB provided did not include the disputed documents and no supplemental affidavit was provided.
• Did the delay lead to waiver of privilege? It was submitted that the defendant should have re-asserted privilege in formal correspondence between August 2020, when retention of disputed material was confirmed, and when the motion issued in March 2021. The court held that the actual period of any delay prior to the motion issuing was four months, and since there was some explanation for it, it was not of a magnitude to deny the relief.

Conclusion

It is important to get discovery right at the outset to avoid remedial action. A detailed comparison of the initial production with the discovery listing is always the most prudent approach. If there is an inadvertent disclosure it is important to:

• Identify the documents involved to the receiving party promptly, explain clearly what has happened and, if possible, how it occurred
• Request that the documents be returned and/or seek confirmation they will not be further disclosed/used
• Set a reasonable deadline for a satisfactory response and be clear as to the consequences
• Re-assert privilege where disclosed material is privileged
• Issue a motion seeking relevant reliefs as soon as possible, if necessary to do so

For more information and expert advice on discovery obligations and requirements, contact a member of our Commercial Disputes team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1] Walters & Another v Lexington Services Ltd [2023] IEHC 493

[2] The proceedings issued in January 2018, the relevant motion issued in March 2021, was heard at the end of June / early July 2022 and judgment was delivered in July 2023.

[3] Endorsed by Clarke J. in Byrne v Shannon Foynes Port Co [2008] 1 IR 814 – “(1) Was it evident to the solicitor seeing privileged documents that a mistake had been made? (2) If not, would it have been obvious to the hypothetical reasonable solicitor that disclosure had occurred as a result of the mistake?”