SOLICITOR SIGNING THE STATEMENT OF TRUTH IN A DISCLOSURE STATEMENT: NOT PERMISSIBLE AND NOT ADVISABLE

There has been a lot of discussion on Twitter recently in relation to a search term that arrived on this blog “solicitor signing disclosure statement”.  So many people contributed to that discussion that I cannot thank them all.  However it has given rise to an opportunity to consider the rules and case law in relation to signature of the disclosure statement.

“I do not agree with Miss Nicholson that the non-compliance is a mere technicality in this case. Nor is it relevant that the petitioners may themselves be in breach of this agreement. The purpose of the rule is to bring home to each party his or her individual responsibility for giving standard disclosure. Except to the extent permitted by the rules, it requires the party himself to make the disclosure statement. This clearly has not happened. The petitioners are entitled to complain that it is not. It is not a mere technicality.”

THE DISCUSSION ON TWITTER

  • One contributor said that solicitors were routinely signing disclosure statements on behalf of their clients and this was being permitted by district judges.
  • Others were objecting vociferously to the practice.
  • One contributor pointed out the case law on the subject (of which more below).

THE RULES

CPR 31 deals with disclosure.

“(5) The list must include a disclosure statement.
(6) A disclosure statement is a statement made by the party disclosing the documents –
(a) setting out the extent of the search that has been made to locate documents which he is required to disclose;
(b) certifying that he understands the duty to disclose documents; and
(c) certifying that to the best of his knowledge he has carried out that duty.
(7) Where the party making the disclosure statement is a company, firm, association or other organisation, the statement must also–
(a) identify the person making the statement; and
(b) explain why he is considered an appropriate person to make the statement.
(8) The parties may agree in writing –
(a) to disclose documents without making a list; and
(b) to disclose documents without the disclosing party making a disclosure statement.
(9) A disclosure statement may be made by a person who is not a party where this is permitted by a relevant practice direction.”

 

HOW IMPORTANT IS THE DUTY TO SIGN THE DISCLOSURE STATEMENT?

This blog has before at Oktritie International -v- Gersamia and Jemai [2014] EWHC 821 where a litigant was sentenced to 20 months in prison.  Part of the reason for committal was the defect in the disclosure statement.

ARROW TRADING – FAILURE TO COMPLY IS NOT A “TECHNICALITY”

In Arrow Trading -v- Edwardian Group Limited [20014] EWHC 1319 (Ch) Mr Justice Blackburne considered an argument that a failure to comply with the rules in relation to a disclosure statement was a “technicality”.

The judge considered the nature of the disclosure statements by the respondent.
“It is signed by Jasminder Singh with his name underneath. Then in the reference to “position or office held, if signing on behalf of a firm or company stating why you are the appropriate person to make the disclosure statement”, the following appears:
“I am the second respondent [he is in fact the third respondent in these proceedings] and have coordinated the search for documents from the second to eleventh respondents in conjunction with the second to eleventh respondents’ solicitors, Baker & McKenzie.”
  1. There was some supplemental disclosure and a form was duly filled out and signed, again by Jasminder Singh, with the same addendum reciting, wrongly, that he is the second respondent and that he had coordinated the search for documents with the second to eleventh respondents in conjunction with Messrs Baker & McKenzie.
  2. In my judgment, a disclosure statement in this form does not comply with the requirements of the rule. The relevant rule is 31.10. It requires that:
“(2) Each party must make and serve on every other party a list of documents in the relevant practice form.
(3) The list must identify the documents in a convenient order and manner and as concisely as possible.
(4) The list must indicate –
(a) those documents in respect of which the party claims a right or duty to withhold inspection; and

(b) (i) those documents which are no longer in the party’s control; and

(ii) what has happened to those documents.”

(5) The list must include a disclosure statement.
(6) A disclosure statement is a statement made by the party disclosing the documents –
(a) setting out the extent of the search that has been made to locate documents which he is required to disclose;
(b) certifying that he understands the duty to disclose documents; and
(c) certifying that to the best of his knowledge he has carried out that duty.”
In (7) there is a reference to where the party making the disclosure statement is a company, firm, association or other organisation (this only applies to the second and seventh respondents which are limited companies). In such case the statement must identify the person making the statement and explain why he is considered an appropriate person to make the statement.
“(8) The parties may agree in writing –

(a) to disclose documents without making a list; and

(b) to disclose documents without the disclosing party making a disclosure statement.”

There is no such agreement in writing in this case.
“(9) A disclosure statement may be made by a person who is not a party where this is permitted by a relevant practice direction.”
There is no relevant practice direction in this case.
  1. The two lists and disclosure statements to which I have referred fall short of what is required for each of the four reasons set out in Mr Lightman’s skeleton submissions at paragraph 30, namely, (1) none of the parties giving disclosure (other than Jasminder Singh) has deposed that he or she is aware of and understands the duty of disclosure; (2) none of them (other than Jasminder Singh) appears personally to have carried out that duty; (3) it is not clear what, if any, search any of the shareholder respondents has made to locate documents which are to be disclosed; and (4) it is not clear which documents have been (and have not been) disclosed by each of the shareholder respondents.
  2. There has been a lengthy correspondence between Bird & Bird on behalf of the petitioners and Baker & McKenzie on behalf of the shareholder respondents about the matter. The relevant letters are carefully referred to in Miss Nicholson’s skeleton argument. She submits that in the light of that correspondence and the confirmations and explanations provided by Baker & McKenzie in the course of their letters, the petitioners are raising a pure technicality and insisting that each of the shareholder respondents make a separate disclosure statement. She also refers to the fact that, for their part, the petitioners have themselves fallen short of what, on the face of it, the rule would require, in that a disclosure statement has been provided by Mr Gulhati alone claiming to be the sole director of the second petitioner, but stating he is no more than a beneficiary of a discretionary trust that owns the first petitioner.
  3. I do not agree with Miss Nicholson that the non-compliance is a mere technicality in this case. Nor is it relevant that the petitioners may themselves be in breach of this agreement. The purpose of the rule is to bring home to each party his or her individual responsibility for giving standard disclosure. Except to the extent permitted by the rules, it requires the party himself to make the disclosure statement. This clearly has not happened. The petitioners are entitled to complain that it is not. It is not a mere technicality. It follows, therefore, that this part of the petitioners’ application succeeds.”

SO SIGN A DISCLOSURE STATEMENT AT YOUR PERIL

In an article  in the New Law Journal in 2011 Andrew Parker stated that

“the legal representative has no power to sign the disclosure statement under CPR Pt 31.10. In practice, solicitors do sign disclosure statements and the point is rarely taken, but whenever the disclosure given or the scope of the search is likely to be contentious, the advice must always be that the rules do not permit the solicitor to sign.”

It is surprising that the point is rarely taken.  Signature by the solicitor is clearly dangerous and puts the signatory at risk as much (if not more) than the client.

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