In the recent case of WH Holding and another v E20 Stadium LLP [2018] EWHC 2578 (Ch), the High Court has reminded parties in a civil claim to be careful when redacting their disclosed documents.
 
What is redaction?

In a civil litigation claim, both parties have a duty of disclosure. This duty requires the parties to state that the document exists or has existed. The other party then has the right to inspect the document in question, unless:

• The disclosing party does not have possession of the document;
• The disclosing party has a right or duty to withhold inspection of the document;
• The disclosing party considers inspection to be disproportionate to the issues in the case (but he must nonetheless state in his disclosure statement that inspection of those documents will not be permitted on the basis that it would be disproportionate to do so).

It is under this duty of disclosure that the ability of redaction bears relevance. In Ennis Property Finance Ltd v Thompson [2017] EWHC 3263 (Ch), it was held that redaction applies to both standard disclosure and the right to inspect documents referred to in the statements of case. Redaction is the process of censoring or removing parts of a text due to their irrelevance to the matter in hand.

Ennis exemplified that one basis for redaction would be where the material in question was sensitive so that it would have been “disproportionate and commercially dangerous” for the claimant to have disclosed them without any ability to redact.

Here, the claimants had disclosed six documents to establish their right to bring a claim under the loan agreements and guarantees to which they were not a party. The documents had been redacted to hide matters which were alleged to be “commercially sensitive” and “irrelevant”. On the facts, the claimed amount was substantial from the defendants’ perspective, but formed a relatively small part of a complex transaction for the claimants. The judge refused the defendants’ application for disclosure of the six unredacted documents, holding that all disclosure requirements had been satisfied.

The judge noted that no authority pointed towards the right of redaction having “vanished” under the Civil Procedure Rules (‘CPR’) nor that the right remains. However, she did highlight that recent cases, such as Shah v HSBC (Private Bank) UK Ltd [2011] EWCA Civ 1154 and National Crime Agency v Abacha [2016] Civ 760, appear to have “taken for granted” the fact that the right to redact remains.

The position after WH Holding

The defendant disclosed around 7,700 documents, however, it claimed that 3,720 were irrelevant and commercially sensitive, and so were redacted accordingly.

The High Court exercised its power under CPR 31.19(5) to inspect the documents to ascertain whether certain redactions had been properly made.

The judge concurred with Charles Hollander QC that the substantial redaction of a large volume of disclosed documents justified the adoption of greater vigilance to ensure that the ability to redact had not been abused or liberally interpreted.

The judge stated that the purpose of his inspection was to ascertain whether the redacted information was relevant to the matter, applying the standard disclosure test as provided in CPR 31.6. He was not required to consider whether the information was commercially sensitive.

The judge held that the redactions had, predominantly, been properly made. Some redactions were modified or removed, mainly for purposes of consistency and intelligibleness.

Nonetheless, the defendant was still ordered to pay 50% of the claimants’ assessed application costs. This is because, despite the judge’s view that the redactions were generally correct, the process of reviewing the redactions was substantial, with the original redactions having been reduced.

Lessons learned

Whilst Ennis demonstrated that the right to redact remains, WH Holding encourages a holding back on using this right too liberally. Considerable redactions may inevitably result in lengthy reviews and suspicions, adding pressure on the redacting party to ensure that their redactions are indeed correct and accurate. If not, they may incur penalties in the form of costs consequences.