When considering whether a redaction to a disclosed document has been properly made, the courts in England and Wales will usually be satisfied by a statement from a solicitor with responsibility for the disclosure process confirming that it has. However, where there has been heavy redaction of many documents, disclosing parties should expect the court to be more vigilant to ensure that the right to redact is not being abused or too liberally interpreted. In JSC Commercial Bank Privatbank v Kolomoisky & others[1] the High Court of England and Wales ordered the first defendant to instruct its solicitors to re-review the redactions made to over 6,000 disclosed WhatsApp messages and to provide an explanation for each.
Background
JSC Commercial Bank Privatbank (the ‘Bank’) alleges that the first and second defendants, Messrs Kolomoisky and Bogolyubov, the Bank’s founders and former majority shareholders, orchestrated the fraudulent misappropriation of over US$1.9 billion from the Bank prior to its nationalisation. The Bank alleges that this misappropriation was achieved through loans by the Bank to companies controlled by the first and second defendants.
The case is subject to the Disclosure Pilot Scheme, set out in the Civil Procedure Rules (‘CPR’) Practice Direction 51U. An order for extended disclosure was made in June 2020, which attached the disclosure review document containing the Issues for Disclosure and the models to be applied. The Issues for Disclosure included issues in relation to (a) the control exercised by the first and second defendants over the claimant, and (b) the first and second defendants’ ownership and control of other entities and assets relevant to the claimant’s claim.
Mr Kolomoisky gave disclosure in June 2021. Only a small proportion of the documents disclosed came from Mr Kolomoisky’s own sources. The reason for this being that Mr Kolomoisky did not use a personal email account, did not use a desktop computer to store or create electronic documents, and only had two social media accounts – WhatsApp and Viber.
Mr Kolomoisky disclosed 350 pages of WhatsApp chats, comprising a total of 6,209 messages. All but 272 of those messages had been redacted or partially redacted. In several instances, it was not possible to identify the counterparty to the chat.
The Bank’s solicitors challenged the extent of the redactions and, in March 2022, Mr Kolomoisky’s solicitors disclosed further information, revealing the identity of the counterparties to many of the WhatsApp messages, and increasing the total number of unredacted messages from 272 to 422. Some of the additional WhatsApp messages disclosed in part comprised correspondence between the first and second defendants, redacted on the basis that it was about unrelated commercial transactions. In its cover letter, Mr Kolomoisky’s solicitors stated that they accepted the newly unredacted messages ‘may be relevant to the issues for disclosure’ but that they considered them unlikely to be of any particular significance to the issues in dispute in the proceedings.
The Bank made an application for the court to make further orders in relation to the redacted WhatsApp messages.
The law
Paragraph 16 of CPR PD 51U sets out the right to redact:
16.1 A party may redact a part or parts of a document on the ground that the redacted data comprises data that is –
(1) irrelevant to any issue in the proceedings, and confidential; or
(2) privileged.
16.2 Any redaction must be accompanied by an explanation of the basis on which it has been undertaken and confirmation, where a legal representative has conduct of litigation for the redating party, that the redaction has been reviewed by a legal representative with control of the disclosure process.
Paragraph 17 of CPR PD51U addresses failure to comply with an order for Extended Disclosure:
17.1 Where there has been or may have been a failure adequately to comply with an order for extended disclosure, the court may make such further orders as may be appropriate, including an order requiring a party to –
… (2) undertake further steps, such as further or more extended searches to ensure compliance, orders to produce documents or make a witness statement explaining any matter relating to disclosure
The High Court’s decision
Given the limited disclosure of documents from his own sources, the court considered that the WhatsApp messages had the potential to be a particularly important and valuable source of relevant information.
The court held that Mr Kolomoisky’s solicitors’ statement that they considered the additional unredacted WhatsApp messages to be only arguably relevant to the issues for disclosure suggested that they had misunderstood the relevant test for redaction. The data to be redacted must be irrelevant to any issue in the proceedings, not just any of the issues for disclosure.
The court further held that the solicitors’ statement that the additional messages were unlikely to be of any particular significance to the issues in dispute suggested that they had taken an unduly narrow view of what was capable of being relevant. This impression was confirmed by the disclosure of the messages between the first and second defendants, which were redacted on the basis that they were about unrelated commercial transactions. The court considered that there was a strong probability that the messages would have a direct bearing on the ability of the claimant and the court to obtain a proper understanding of the true nature of the business relationship between the first and second defendants. The mere fact that the commercial transactions to which the messages related were not transactions with which the proceedings were directly concerned, and took place sometime later, did not mean that the messages would necessarily be irrelevant to any issue in the proceedings.
The court accordingly held that paragraph 17 CPR PD51U was engaged and went on to look at the appropriate nature of relief to grant. Three options were considered and dismissed: disclosure of all the messages in unredacted form; disclosure into a confidentiality club; and inspection by the court.
The court concluded that the appropriate relief was to direct a further review of all the directions, having regard both to the need to assess them against all the issues in the proceedings, and to the views expressed by the court regarding the breadth of what is capable of being relevant. Further, the court directed that Mr Kolomoisky instruct his solicitors to prepare a schedule identifying in relation to each redacted WhatsApp message, the names of the recipient, the date and time of the message and a generic description of the subject matter of the exchange.
The court acknowledged that the production of the schedule may prove to be time-consuming, and in some cases would be regarded as disproportionate. However, the court considered it was just and proportionate in the particular circumstances of these proceedings, including most especially the very limited disclosure of documentation from Mr Kolomoisky’s own sources and the nature and complexity of the case.
Takeaways
Redoing a document review and producing a detailed redaction schedule are unenviable and potentially expensive tasks. To avoid similarly unwelcome results, if it becomes clear that heavy redaction is going to be required across many documents, ensure that potential objections are addressed when giving disclosure. In particular:
- Clearly demonstrate an understanding and proper application of the relevant rules. Ensure that that clarity is maintained in all correspondence, to avoid an unwarranted impression of any misapprehension in this regard.
- Consider each redaction and if it may not be apparent to the inspecting party why it has been made, provide a clear explanation for it. A generic statement that a redaction is made on the basis that the data is ‘irrelevant and confidential’ will not be sufficient in all cases.
[1] [2022] EWHC 868 (Ch)
Contributors
Alex Radcliffe