Hard Copies, hard work

Posted on 06 August 2015. Source: The Law Society Gazette

Hard Copies, hard work

A recent Companies Court decision demonstrates the danger of overreliance on technology in disclosure, particularly where there are significant volumes of old, hard copy documents. Treating hard copies like electronic documents may mean that there has been a failure to carry out a reasonable search, so that proper disclosure is not made.

In this case, the result was catastrophic for the applicants, who were subject to an unless order. Their failure to disclose hard copy documents properly led the judge to conclude that they had failed to meet their disclosure obligations. Inevitably, an application for relief from sanctions followed (which failed due to the serious and significant nature of the non-compliance, the inadequate care shown by the applicants, and the fact that they had failed to conduct the proceedings efficiently or at proportionate cost).

The case, Smailes and another v McNally and another [2015] EWHC 1755 (Ch), concerned claims of dishonesty and fraud made against former office holders of an insolvent company that owed around £50m in tax.  The applicant liquidators were funded by HMRC.  The claim concerned events dating back to 2003.  The claim was issued in 2011, five years after the company had gone into liquidation. 

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