High Court Orders Confidentiality Ring for Discovery in Competition Proceedings

In Goode Concrete v CRH PLC & ors [2017] IEHC 534, High Court, Barrett J, 7 September 2017, the Court ordered a confidentiality ring for discovery in proceedings which alleged a breach of competition law, by way of collusive tendering, concerted practices and/or abuse of a dominant position. 

Background

The claims were denied by the defendants and the first named defendant (CRH) maintained that the action arose because it had refused to purchase the plaintiff's (Goode Concrete) business. CRH also alleged that the purpose of the wide ranging discovery sought by Goode Concrete was to seek to increase potential costs so that CRH would be incentivised to settle the proceedings.

Goode Concrete had previously indicated to the Court that the cost of the discovery would not exceed €100k but the discovery now proposed to the Court could cost €8.5 million.

Decision

The Court noted that the allegations of below-cost selling and abuse of dominant position set out in the pleadings were bare allegations without any supporting facts.

The Court was of the view that, in competition cases, there has to be a solid basis for discovery (ie the documents sought must be relevant, necessary, proportionate, not speculative, not oppressive and not a tactic-of-war between the parties). Furthermore, the Court, in balancing the interests of the respective parties had to consider whether there was a need to protect the interests of the defendants by imposing a 'confidentiality ring' requirement.

The Court noted that a director of Goode Concrete, (PG), appeared anxious to gain access to details in relation to the prices and costs and efficiencies of the defendants, but had never adequately explained why he, as distinct from his expert, had to gain access to this information.

The Court analysed the case-law on confidentiality rings and pointed out that it had an inherent jurisdiction to order a confidentiality ring.  It noted that confidentiality rings were increasingly becoming standard practice in competition law proceedings in the UK because of the costs of discovery and the manner in which discovery in such proceedings was prone to being used as a commercial weapon.

In the circumstances the Court ordered that:

(I) it was not necessary for PG, as distinct from the independent expert advisors engaged by Goode Concrete, to see any discovered material,

(II) any discovery ordered by the court would be the subject of a confidentiality ring comprising the legal advisors to Goode Concrete and its independent experts, with liberty to apply to the Court if the operation of the confidentiality ring presented a difficulty,

(III) the legal advisors to Goode Concrete would undertake to the Court (i) not to disclose to any party outside the confidentiality ring the substance or tenor of any discovered documentation, and (ii) to respect the spirit as well as the letter of the order concerning the establishment of the confidentiality ring, and

(IV) the solicitors to Goode Concrete would undertake that any expert to be joined to the confidentiality ring would only be joined when they had agreed in writing to abide by the same terms of confidentiality as the legal advisors in respect of the discovered documents.

With regard to the proportionality of the discovery being sought, the Court indicated that if a party wished to argue that a discovery application was disproportionate and would lead to excessive costs, it would have to provide evidence to the Court by way of facts and figures. The Court noted that it had been offered a bald statement by Goode Concrete that the discovery being sought was disproportionate but it had no evidence before it to properly  decide on the issue of proportionality.

For further information please contact Paula Mullooly.

Date published: 31 October 2017