Sinclair Roche & Temperley (a firm) v Somatra

Late in the afternoon of the last working day before the hearing of this appeal was due to start SRT applied for an order that HFW produce all documents in their clients’ correspondence file between 25^th March and 22^nd April 1994 relating to the original action which contained or evidenced communications between Mr Domingo and Somatra and communications between HFW and underwriters and between underwriters themselves concerning settlement of the original action.

We refused this application on the first day of the appeal for reasons which we said we would give later. Here they are.

About a month before the trial of these proceedings started SRT’s solicitors applied for production of the entire files of HFW, Arig and the Lloyds claims office in relation to the original action. Hull underwriters claimed privilege for these documents but said that they were prepared to produce what came to be called the three “Arditti letters” on certain terms. These terms were subsequently embodied in an order of 9^th October 2001 in which among other things SRT undertook not to issue or seek to pursue any further summonses for the production of documents against Arig or HFW. This is how things stood during the trial although a statement was admitted from Mr Wilson, an HFW partner and author of the Arditti letters, who simply said that he believed that the statements made in these documents were true.

On 15^th August 2003 (four and half months after permission to appeal to this court had been given) SRT’s solicitors wrote to HFW saying that one of the issues on which permission to appeal was granted was the finding of the judge that Mr Domingo had authority from the underwriting market to make an offer of 75% although there were contemporaneous documents which tended to contradict Mr Domingo’s evidence. They continued:

“It is therefore highly likely that the Court of Appeal will enquire as to whether the relevant underwriters had made available sections of their files in order to allow the court better to understand these issues.”

So they invited voluntary disclosure of the underwriter’s claim files relating to Mr Domingo’s authority.

HFW did not reply until 2^nd October 2003. The delay was largely caused by SRT’s solicitors failure to deal with an outstanding issue about costs which HFW said they would like to sort out before taking their client’s instructions. In their reply HFW said that they had taken instructions from Arig who wished to preserve privilege in relation to their files. They continued:

However our clients are willing to recognise that the Court of Appeal may have a special interest in this aspect of the case and wish to see further contemporaneous documents. They also recognise our own position as solicitors and officers of the court in wishing to assist the Court of Appeal – subject of course to our client’s interest.

Accordingly we are allowed and authorised to respond to you positively and to offer further assistance on contemporaneous documents relating to Mr Domingo’s settlement authority…..

The offer was made on terms that this court would order production which would be limited to documents on HFW’s client correspondence files between 28^th March and 12th April 1994 relating to Mr Domingo’s settlement authority.

Mr Phillips appeared for Arig on the application and produced a draft order containing what he told us were the only terms on which his clients were prepared to consent to production of any documents. It contained the terms of the offer to which we have already referred, a number of other terms and undertakings to which it is not necessary to refer and (as part of the order) that:

The production of all or any documents … shall not constitute a waiver of privilege over any document attracting such privilege other than the documents so produced…..

The application was strongly opposed by Somatra. Mr Symons said that the application for production was made too late and was in breach of the undertaking given to the court on 9^th October 2001. If any documents were produced which SRT applied to put before this court there would be substantial arguments as to whether they should be allowed to do so. Like the Arditti letters they would only be a selection of the relevant documents for which privilege had been claimed. Somatra might now wish to argue that privilege had been waived and so all relevant documents should be before the court. In any event it was likely that the appeal would have to be adjourned to enable Somatra to deal with such documents as were admitted.

We only had to decide whether or not to order production of the documents sought on the application. It was common ground that we had no jurisdiction to do so other than on terms to which Arig consented. We did not think it was appropriate to do so. The request for production for further documents was not initiated by the court as the letter of 15^th August 2003 suggested. If Arig chose to produce its documents voluntarily on terms which it could agree all well and good. If it would not do so, we did not think it would be right to order it to produce documents for which it claimed privilege. Nor could we have ordered that by producing documents Arig had not waived privilege. Somatra understandably wish to keep this point open and we did not hear any argument on and were not asked to decide it.