Tuesday 25 March 2014

Disclosure of documents and a patent attorney's duties: a question of proportionality

Bromhead & Co and others v Baillie and others is an extempore 25 February decision of Mr Justice Arnold, sitting in the Chancery Division, England and Wales, on one of those most delicate of issues: the extent to which a patent attorney, seeking to defend himself against accusations of professional negligence, can obtain information in the possession of his former client in order to do so.

In this case the patent attorney had been retained to advise on patents covering his client's glow-in-the-dark material. The client claimed that it had, in seeking to secure patents and to develop commercial products using its material, spent large sums of money that it would not have spent, had it been properly advised that there was no real prospect of obtaining the patents in the first place. The client's case was principally based on the proposition that, since the patent attorney had been retained to provide advice on suggested strategies in order to exploit the material, including a patent portfolio, the retainer was wide enough to allow for the provision of advice on the recovery of losses. The patent attorney however maintained that his client's alleged losses had been caused by other factors. The patent attorney applied for specific disclosure, under the Civil Procedure Rules, CPR r.31.12(2)(a), of any documents, including memorandums and notes, that were related to the downfall of his client's commercial endeavour, the losses suffered, any problems with the material, sales, marketing and market conditions. This application was however refused, the master holding that the disclosure sought was not necessary for determining the scope of the patent attorney's duty towards his client and that only the factual matrix of the events was relevant, rather than an in-depth analysis.

On appeal to Arnold J the court had to consider two issues: (i) were the documents for which the patent attorney sought disclosure actually relevant and (ii) if so, whether this request for disclosure was proportionate. The patent attorney argued that the client's disclosure of management accounts, minutes of board meetings, cash flow documents and business plans to date had been inadequate and that it failed to provide an overview of the causes of the losses, which was relevant to the pleaded case.

Arnold J dismissed the patent attorney's appeal on the basis that it would be possible to conduct an adequate investigation of what caused the client's loss by reference to such material as was already available. In his view

* The documents which the patent attorney wanted disclosed were arguably relevant, if the patent attorney was correct in to say that his duty was merely to provide information (in which case the client's case would probably fail) rather than to furnish advice. It could also be argued that it might be difficult to determine whether the matter was an information case or an advice case, and that determining the scope of the patent attorney's duty required an investigation of the actual causes of the client's losses.

* However, even if the documents were relevant, the request for their disclosure was disproportionate. The disclosure sought was extremely-wide ranging, covering a period of over four years and a wide range of documents concerning a wide range of subjects. The provision of disclosure of any documents pertaining to any problems experienced in the specified areas would clearly be a massive exercise. While it wasn't the patent attorney's fault that the request was made so close to the trial, and there had been no specific evidence that the disclosure could not have been completed before trial, the review and disclosure of such a large volume of documents would have inevitably descended into the minutiae of causation, rather than merely a broad theme.

To the relief of many actual and potential litigants in similar circumstances, Arnold J took a cautiously realistic view of the cost-benefit  ratio of disclosed evidence of the electronic variety when he observed that the disclosure of thousands of emails was not going to remedy the patent attorney's concerns -- but that it would burden both parties with large costs.  This set this blogger thinking: how does one actually charge for the time spent in priming oneself for the task of reading vast quantities of email correspondence and then in reading and evaluating it, given that part of the task involves a degree of professional expertise while another part of it involves ploughing through the detritus of out-of-office messages, copied-in duplications of emails already read, and other evidentially unproductive text.

This item is based on a Lawtel note on the court's ruling.

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