Northumbrian Water Ltd v British Telecommunications Plc

On or about 30^th August 2004, a high security underground service tunnel belonging to the Respondent, BT, was allegedly damaged by a burst water main owned by the Claimant, NWL. On 22^nd September 2004 BT sent NWL a letter notifying them of the claim in general terms and saying that BT intended to conduct the pre-action stage in accordance with ‘the pre-litigation protocol to dispose of damage to network claims’. NWL discovered that BT had themselves been digging a new underground tunnel in the vicinity of the burst water main and on 4^th March 2005 they sought pre-action disclosure of various documents relating to that work pursuant to CPR 31.16. Clearly, the existence of the new BT tunnel might have a significant impact on NWL’s potential liability for their burst water main.

On 17^th March 2005 BT’s representatives, the Claims People Group plc, stated that “We will provide the information you have requested as soon as it is possible for us to do so.” However, despite being chased on a number of occasions over the next few months, the documentation was not provided by BT or those working on their behalf. Neither was the protocol procedure utilised to progress BT’s claim.

On 10^th October 2005 NWL’s solicitors prepared an application for pre-action disclosure under CPR 31.16, supported by a statement from their solicitor, Mr. Alan Oliver, dated 11^th October 2005. The application was issued on 12^th October 2005. By then Mr. Oliver was in receipt of BT’s letter of 10^th October, which said:

“I have now obtained considerable documentation pursuant to your previous request. I have instructions to voluntarily disclose these papers to you subject to confirmation that you will pay copying charges …”

Mr. Oliver replied on 12^th October, telling BT about the application, pointing out that no list of the documents obtained had been provided and agreeing to the copying charges. He said:

“We have already prepared our application to the court for pre-action disclosure including the originating application, draft order, schedule of documentation and a detailed witness statement. That application has been sent to the court today. Once we have a return date we will notify you. We are pleased to note that you appear now to have made some progress towards obtaining the documentation we requested in March of this year. You state only that you have obtained considerable documentation, but you have not provided us with a list or given any information as to what documentation you have obtained. Given the history of this matter, which is self-evident from the correspondence including the time that we have been waiting and the previous promises, we are proposing to proceed with our application in any event.”

In these circumstances the application was issued on 12^th October. It seems to me that, given the extensive delays on the part of BT and the number of broken promises made by those representing them, it was not unreasonable for Mr. Oliver to decide to issue the application. He had no idea at that stage what documents would be provided. What matters now, of course, is whether the documents that were provided, and which were sent to him on 14^th October, provided a sufficient answer to the application made.

On 14^th October, as I have said, BT enclosed some of these documents. They enquired: “Leaving aside the issues of costs upon which I comment further below, do you now have the documents you require?” The letter invited NWL to withdraw their application. The letter and the documents were apparently received by NWL on about 20^th October.

On 20^th October, NWL’s solicitors replied saying that they did not intend to withdraw the application and identified various documents which they said had still not been provided. This led to a further round of correspondence and a letter from BT dated 24^th October, which said:

“I note you think much of the documentation provided to you is not relevant. I have disclosed such documentation as BT holds. The documents listed in your application are documents which will be/should be held by either Marconi or Eirscott. To date, despite requests, BT has been unable to obtain anything more from either contractor than has been provided to you.”

Yesterday, a statement of Ms Makol was provided, opposing the application. Her principal point, as outlined in the letter of 24^th October, was that BT had disclosed all the relevant documents that they had in their possession.

The relevant parts of CPR 31.16 provide as follows.

“(3)

The court may make an order under this rule only where --

(a)

the respondent is likely to be a party to subsequent proceedings;

(b)

the applicant is also likely to be a party to those proceedings;

(c)

if proceedings had started, the respondent’s duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and

(d)

disclosure before proceedings have started is desirable in order to --

(i)

dispose fairly of the anticipated proceedings;

(ii)

assist the dispute to be resolved without proceedings; or

(iii)

save costs.”

The Court of Appeal explained the operation of CPR 31.16 in Black & Ors. v. Sumitomo Corp [2002] 1 WLR 1562. Rix LJ made it clear that the claimant had to prove that each of the four elements of 31.16(3) were in place and then go on to persuade the court to exercise its discretion in favour of granting pre-action disclosure as opposed to waiting until disclosure took its place in the normal litigation process. As to the desirability of pre-action disclosure, that is to say the criterion at 31.16 (3)(d), he referred to another Court of Appeal case, Bermuda International Securities Ltd. v. KPMG [2001] Lloyd’s Rep PN 392 and at paragraphs 81-82 set out the correct approach of the court to such questions.

As to the exercise of discretion. Rix LJ said, at paragraph 88 of his judgment in Black,:

“That discretion is not confined and will depend on all the facts of the case. Among the important considerations, however, as it seems to me, are the nature of the injury or loss complained of; the clarity and identification of the issues raised by the complaint; the nature of the documents requested; the relevance of any protocol or pre-action inquiries; and the opportunity which the complainant has to make his case without pre-action disclosure.”

This morning, Mr. Lundie, who appears on behalf of NWL, sought permission to amend the schedule of documents sought. All but one of those amendments was not opposed by Mr. Basu, and I therefore allowed them. The amendment which was opposed was in relation to category 4, which endeavoured to widen the documents sought under that category. I refused that contested element of the application. It would have been inappropriate even to consider making orders for disclosure in respect of documents that had not previously been sought by way of correspondence.

Accordingly, in its amended form the schedule of documents sought read as follows:

“1.

Details of any site investigation carried out or any resultant report and interpretation of ground conditions prior to commencing tunnelling works.

2.

Settlement analysis carried out by the tunnel designer with consideration of structures and services.

3.

Details including all correspondence and memoranda and attendance notes of communications between BT and/or the designer of the tunnel and any statutory undertakers or the London Borough of Newham.

4.

The heading support design.

5.

Health and Safety plan with risk assessments completed by the designer in accordance with the Construction, Design and Management Regulations 1994 for the tunnelling work prior to 30^th August 2004.

6.

The face logs from the tunnelling works with daily record sheets or site diaries relating to the sequence of work up to 30^th August 2004.

7.

The contract between British Telecommunications plc or its subsidiaries and Eirscott Engineering Ltd. and the specification of work to be carried out under that contract for the tunnelling work.”

I deal with each category in turn below. It is clear that all of these documents relate to the tunnelling work being carried out on behalf of BT and are therefore sought by NWL in the hope of being able to set up a defence to the original claim on the basis that the water main was damaged due to BT’s own tunnelling work.

Ms Makol says that NWL “have been provided with a copy of the Aperio Plan/Report on the condition of timber lined tunnels. BT has no other documents within this category.” The Aperio Plan/Report, which I have seen, was a detailed ground mapping radar survey. Accordingly, Ms Makol is essentially saying that BT has provided to NWL the only document that fits within the description of category 1 and that there are no such other documents in the possession of BT.

In those circumstances it seems to me that it is not possible to say that the test at CPR 31.16(3)(c) has been made out by NWL. Standard disclosure would cover the Aperio Report, which has been provided, but it obviously would not extend to other site investigation documents which, as set out by Ms Makol, do not exist. Mr. Lundie was not really able to demonstrate that there were or might be any other site investigation documents. It is right to say that he took me to the document at page 90 of the bundle, which was a request for a quotation which indicated the possibility of a different methodology, not involving open cut methods, but which goes on to say that this possible alternative could only take place with what was referred to as a detailed survey. There is nothing to suggest that the alternative methodology was ever pursued or that the detailed survey referred to was ever carried out.

Accordingly, it seems to me that NWL have not demonstrated that CPR 31.16(3)(c) is applicable in respect of category 1. Further, given that the Aperio document appears on its face to be comprehensive, it is also not clear how or why the test at CPR 31.16(3)(d) has been made out either. I do not believe that it would be desirable to require site investigation documents, in addition to the Aperio Plan, to be provided at this stage. For those reasons I reject the application in respect of Category 1.

Ms Makol says in relation to this category:

“I am informed and believe that any settlement analysis information would have been obtained by BT’s contractors. To date BT’s request to its contractors for documents in this category have only produced a copy of a method statement by Eirscott Engineering, which has been provided to the applicant. BT has no other documents in this category to disclose.”

Thus, it appears that no settlement analysis has been carried out by, or is in the possession of, BT. If there was any such analysis it was carried out either by the contractors or the subcontractors, although no one can say with any certainty at all whether there is any such analysis or whether any such experiments have been done. It seems to me that, even if there had been such an analysis, the results of it would have been reflected in the method statements and/or design produced either by the main contractor or the subcontractor, or any consultants on their behalf. Provided, therefore, that the documents provided to NWL include that method statement and that design -- which is a point to which I shall return -- it seems to me there is no justification for requiring BT to provide the (potentially non-existent) settlement analysis documents as well.

Thus, I do not believe that, in relation to this category, NWL have made out the grounds under CPR 31.16(3)(c) or (d). It is not clear that the documents exist and it is not clear, even if they did exist, whether or not it would be desirable for them to be disclosed at this stage. I make it clear, however, that that conclusion is based on my view that the design and the method statements are important documents and should be provided prior to litigation.

Ms Makol’s evidence was to the effect that the designers, who were not BT, had not provided any communications with statutory undertakers or the London Borough of Newham, and that in any event BT had no such documents. It was wholly unclear whether there were any such documents at all. In my judgment, the evidence does not demonstrate that such (potentially non-existent) documents would be caught by the standard disclosure rules and therefore the test under CPR 31.16(3)(c) is not made out.

In any event in respect of this category I am bound to say that I do not consider that NWL have demonstrated that it would be desirable for these documents to be disclosed at this stage. Accordingly, I do not believe the test under CPR 31.16(3)(d) is made out in relation to this category either. I do not see how or why the early disclosure of communications with third parties would make any real difference at all to the resolution of this dispute. It is important that everybody keeps their eye on the ball. Either the tunnelling works being carried out by BT were badly designed or badly constructed and those deficiencies caused or contributed to the burst water main, or they did not. There is nothing to say that the communications with the statutory authorities would make any difference to that issue one way or the other.

In so far as the design is confined to documents, those documents are clearly important and might have a major impact on the issue set out above. I therefore accept that in relation to category 4 the tests under both CPR 31.16(3)(c) and (d) are satisfied. Where is the design to be found? BT did not carry out the design. It was carried out by consultants employed by the contractors and/or subcontractors. It would normally be within method statements or drawings or specifications. Furthermore, it does appear that BT have endeavoured to provide some documents identifying the design for the tunnel.

The problem is that, on analysis, the documents that BT have provided do not set out clearly or in any detail that design. Indeed, it is fair to say that, on the documents before me, the documents containing the design amount to no more than the one page of the method statement behind tab 9 in the court bundle. It is extremely difficult to believe that that is all there is and that the contract between BT and Marconi, the main contractor, and/or the subcontract between Marconi and Eirscott, the subcontractor, did not contain a detailed design and/or a detailed specification and/or a detailed method statement. Furthermore, such documents would or should be in BT’s possession already, because they would reflect the design of a tunnel that was, after all, being designed and constructed in BT’s name.

I consider that the core contract documents in respect of the design and construction of the tunnel should be disclosed at this stage. They will help NWL in deciding whether or not they have a defence to the claim. They will therefore assist the parties with the pre-action protocol. It may be that such documents will lead the parties to resolve their differences. For all those reasons therefore the desirability test is made out. The design documents sought under category 4 meet the tests under CPR 31.16(3)(c) and 3(d) and should be disclosed.

Ms Makol said that all the health and safety plans and risk assessments which BT has have been provided in their turn to NWL. It does not appear to be suggested that these documents do not meet the tests, either under CPR 31.16(3)(c) or (d): indeed, BT have attempted to provide these very documents.

The trouble is that the Health and Safety Plan that has been disclosed, and which I have behind tab 11 in the court bundle, does not appear to be anything to do with the tunnel in question. For perfectly understandable reasons Mr. Basu could not concede that, but he did accept that the address on the front of the document and its contents appeared to relate to a completely different site.

Therefore, since on the information that I have I am persuaded that currently the wrong Health and Safety Plan has been provided to NWL, it seems to me that an order should be made for the right Health and Safety Plan to be provided. For the reasons that I have set out I consider that the tests under CPR 31.16(3)(c) and (d) have both been met. I regard the Health and Safety Plan as part of the core contract documents to which I have previously referred and which in my judgment should be provided to NWL at this stage. Indeed, on the face of the documents, BT agree with that; they have simply failed, thus far, to provide the right Plan.

Ms Makol’s evidence was to the effect that neither the contractor nor the subcontractor kept daily record sheets. There is nothing to suggest that they did. Accordingly, it seems to me that these documents would not ordinarily be ordered as part of a standard disclosure exercise, because they did not exist. Therefore the test under CPR 31.16(3)(c) has not been made out. In addition, I am bound to say I do not see how the daily record sheets themselves would necessarily be beneficial or why pre-action disclosure of those documents is required or necessary. Thus, the test under CPR 31.16(3)(d) is also not satisfied.

This morning NWL included an unopposed reference in this category to site diaries. That may be a category of documents which do exist. I simply do not know. It seems to me that for the same reasons that I have indicated before, it would not be appropriate for me to order pre-disclosure of site diaries, given that those had not previously been sought in correspondence. However, it is appropriate that I order that BT make enquiries and respond within seven days to NWL to say whether or not there are site diaries kept by the main contractor and the subcontractors. If there are such site diaries then, at this stage, I would leave their disclosure to BT. My firm suggestion would be that such diaries are obtained and provided to NWL. However, I make clear that my order today will be limited simply to the ascertainment of whether or not such documents exist.

Since there was a main contract between BT and Marconi and a subcontract between Marconi and Eirscott, the request as formulated is technically incorrect because it seeks a contract between BT and Eirscott. However, it is quite clear that what was being sought were the contract documents relating to the tunnelling works. Indeed, support for that comes from Ms Makol herself, who says that she has provided what she calls “the generic contract between BT and Marconi”. Unfortunately, she has provided the general conditions of contract, which are of no use to NWL, and not the site-specific documents.

I consider that the contract documents, and by that I mean both the main contract and the subcontract documents relating to the BT tunnel being dug in the vicinity of the water main, are documents which should be available to BT and should be provided to NWL. They clearly meet the test under CPR 31.16(3)(c). As I previously indicated, it is desirable that these documents are provided at the pre-action stage so that NWL can see the basis on which the tunnelling work was being carried out and can reach a conclusion as to whether or not that tunnelling work caused or was likely to have caused the burst water main. The test under CPR 31.16(d) is therefore met in respect of Category 7.

It will be seen that I have refused this application in respect of categories 1, 2, 3 and 6 because of the failure on the part of NWL to demonstrate, in view of the documents provided by BT, that the documents still requested met the tests under CPR 31.16(3)(c) and/or (d). But even if I was wrong about any of those categories, I would exercise my discretion against granting the application in respect of the documents in categories 1, 2, 3 and 6 in any event. They are in my view peripheral documents. Given the early stage at which this claim presently rests, I do not believe that the normal rule, that documents are disclosed following the commencement of litigation, should be altered in respect of those categories. I simply do not believe that it is a worthwhile exercise requiring them to be disclosed at this stage. I am influenced, amongst other reasons, by the fact that the peripheral documents sought are requested by the potential defendant, in the hope that they will help to set up a positive defence against the claim, rather than documents required by a claimant to support or make the claim in the first place.

I regard the documents at categories 4, 5 and 7 to be of a different type. They are not peripheral. Even though the BT tunnelling work relates to the defence, it is clearly going to be a major element in the pre-action discussions, and BT will know that, to the extent that the existence of the key contract documents relating to that work remains unclear, or the documents themselves remain unprovided, their claim may well not be capable of being compromised. It seems to me that at the pre-action stage NWL ought to be entitled to see those key documents, which BT should have in their possession anyway, relating to the tunnelling work. I regard those key documents as being the documents relating to and containing the contracts (both main contract and subcontract) themselves, and the documents relating to the design and the health and safety plan. Accordingly, I should exercise my discretion in favour of allowing this application in respect of categories 4, 5 and 7.

Accordingly, I allow the application in respect of categories 4, 5 and 7. I refuse it in relation to categories 1, 2, 3 and 6, although in relation to category 6 I do order that within seven days BT make enquiries and tell NWL the result of those enquiries as to whether or not the contractor or the subcontractor kept site diaries relating to this tunnelling work.