The extent of the “implied undertaking”
96. Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits. The appellants did not dispute the existence of this principle, and in particular did not dispute its potential application to the affidavit of Mrs Hesse and the witness statement of Dr Tonin.
“Implied undertaking” is an obligation of substantive law
105. Originally the restriction on the use of documents generated by litigious processes depended on an express undertaking. Then in Williams v The Prince of Wales Life, &c, Co, Sir John Romilly MR, while requiring an express undertaking, put the matter in terms of legal rights: “[I]t is not the right of a Plaintiff, who has obtained access to the Defendants’ papers, to make them public.” The following year the protection was not said to rest on an express undertaking, but on a “rule” that “where documents have been produced in obedience to an order of this Court, the Court has a right to say to the person who has obtained their production: ‘Those documents shall never be used by you except under the authority of the Court'”. In Alterskye v Scott, although Jenkins J referred to a concession by counsel that his client obtained discovery on an “implied undertaking”, in the operative part of his reasoning he did not analyse the matter in terms of “undertaking”, either express or implied, but in terms of an “implied obligation not to make an improper use of the documents.” And other judges have preferred to the language of “implied undertaking” the words “implied obligation” or “obligation” or “duty”. Another formula is that the party obtaining discovery is “taken to undertake to the court that the documents obtained on discovery will not be used for any purpose other than the action in which they are produced”. In Harman v Secretary of State for the Home Department Lords Simon of Glaisdale and Scarman, who accepted the general rule of limited use but disagreed with the majority about applying it to documents read in open court, said:
“Imposed by law the obligation is formulated as arising from an undertaking exacted by the court from the party and his solicitor to whom the documents are disclosed. It is the condition upon which discovery is ordered.” (emphasis added)
Lord Denning MR in Riddick v Thames Board Mills Ltd said:
“A party who seeks discovery of documents gets it on condition that he will make use of them only for the purpose of that action, and no other purpose.” (emphasis added)
106. The fact that the role of the word “undertaking” is merely to indicate the way in which an “obligation” which is “imposed by law” as a “condition” of discovery binds the disclosee highlights the substantive nature of the obligation. There is nothing voluntary about the “undertaking”.
“The implied undertaking not to make collateral use of documents disclosed on discovery arises automatically as an incident of the discovery process. It is in no sense implied as a result of dealings between the parties. The discloser may well not have thought of the implications of giving discovery and the disclosee may well not have turned his mind to the matter of what use he can make of the documents outside the action. Had he thought of it, he might well have wanted full freedom to do what he liked with the material, particularly if his own discovery is non-existent or very limited. So the obligation is not to be likened to a term implied in a contract between the parties to the litigation. On the contrary, it is an obligation to the court, not the other party, which is implied. It is for that reason that its breach is treated as contempt. The obligation is imposed as a matter of law.”
107. The expression “implied undertaking” is thus merely a formula through which the law ensures that there is not placed upon litigants, who in giving discovery are suffering “a very serious invasion of the privacy and confidentiality of [their] affairs”, any burden which is “harsher or more oppressive … than is strictly required for the purpose of securing that justice is done.” To that statement by Lord Keith of Kinkel of the purpose of the “implied undertaking” may be added others. In Riddick v Thames Board Mills Ltd Lord Denning MR said:
“Compulsion [to disclose on discovery] is an invasion of a private right to keep one’s documents to oneself. The public interest in privacy and confidence demands that this compulsion should not be pressed further than the course of justice requires. The courts should, therefore, not allow the other party – or anyone else – to use the documents for any ulterior or alien purpose. Otherwise the courts themselves would be doing injustice.”
In Harman v Secretary of State for the Home Department Lord Diplock said:
“The use of discovery involves an inroad, in the interests of achieving justice, upon the right of the individual to keep his own documents to himself; it is an inroad that calls for safeguards against abuse, and these the English legal system provides … through its rules about abuse of process and contempt of court.”
In Watkins v A J Wright (Electrical) Ltd Blackburne J said:
“In my judgment, a serious inroad into [the safeguards referred to by Lord Diplock] and, therefore, into the utility of the discovery process in the just disposal of civil litigation would occur if it were open to a litigant (or his solicitor) to enjoy the fruits of discovery provided by the other side, but avoid the risk of committal for contempt for acting in breach of the countervailing implied obligation on the ground that he was unaware of the existence of the undertaking. I take the view that it does not lie in the mouth of a person to plead ignorance of the legal consequences of the discovery process.”
To speak in terms of “undertaking” serves:
“a useful purpose in that it confirms that the obligation is one which is owed to the court for the benefit of the parties, not one which is owed simply to the parties; likewise, it is an obligation which the court has the right to control and can modify or release a party from. It is an obligation which arises from legal process and therefore is within the control of the court, gives rise to direct sanctions which the court may impose (viz contempt of court) and can be relieved or modified by an order of the court.”
Staughton LJ said: “[A]lthough described as an implied undertaking it is a rule which neither party can unilaterally disclaim.” The importance with which the courts have viewed the obligation under discussion is indicated by the fact that although it can be released or modified by the court, that dispensing power is not freely exercised, and will only be exercised where special circumstances appear.
“Circumstances under which that relaxation would be allowed without the consent of the serving party are hard to visualise, particularly where there was any risk that the statement might be used directly or indirectly to the prejudice of the serving party.”
108. Hence Hobhouse J was correct to conclude:
“The expression of the obligation as an implied undertaking given to the court derives from the historical origin of the principle. It is now in reality a legal obligation which arises by operation of law by virtue of the circumstances under which the relevant person obtained the documents or information.”
Third party obligations
109. The primary person bound by the relevant obligation is the litigant who receives documents or information from the other side pursuant to litigious processes. The implied undertaking also binds others to whom documents and information are given. For example, expert witnesses, who are not parties, commonly receive such documents and information and are bound by the obligation. It is likely that, in the future, documents and information will be provided to persons funding litigation, who will likewise be bound by the obligation. In Harman v Secretary of State for the Home Department the person in contempt was the party’s solicitor. InHamersley Iron Pty Ltd v Lovell it was the party’s industrial advocate. In Watkins v A J Wright (Electrical) Ltd it was a person who was not qualified as a solicitor in the forum, but engaged in day-to-day conduct of the litigation. Laddie J thought “it would be just as much a contempt of court for, say, a shorthand writer or court usher to disclose discovery documents outside the action as it would be for one of the parties to do so.” In both England and Australia, these instances have been broadened into a wider and coherent principle. Thus Hobhouse J said: “[A]ny person who knowingly … does acts which are inconsistent with the undertaking is himself in contempt and liable to sanctions”. In Watkins v A J Wright (Electrical) Ltd Blackburne J said:
“I cannot accept the submission that ignorance of the implied undertaking provides a person with a defence to proceedings for contempt arising out of his breach of the implied undertaking. As is well known, the implied undertaking arises by implication of law on the giving of discovery in the course of a civil action where discovery is required to be given.”
He also rejected a submission that third parties could not be bound by the obligations created by the “implied undertaking”. He said: “I see no basis for confining the scope of the undertaking to those who are parties to the action, to whom discovery has been given, and to the solicitor or solicitors on the record.” As noted above, he held that a person engaged in day-to-day conduct of litigation on behalf of a litigant was bound – an expression not irrelevant to Messrs Hearne and Tierney, who were certainly engaged in day-to-day conduct of a struggle which included but was wider than litigation, and included an attempt to nullify the litigation by legislative means.
110. Turning to Australian authorities, in Esso Australia Resources Ltd v Plowman, Mason CJ (with whom Dawson and McHugh JJ agreed) said:
“It would be inequitable if a party were compelled by court process to produce private documents for the purposes of the litigation yet be exposed to publication of them for other purposes. No doubt the implied obligation must yield to inconsistent statutory provisions and to the requirements of curial process in other litigation, eg discovery and inspection, but that circumstance is not a reason for denying the existence of the implied obligation.”
In Hamersley Iron Pty Ltd v Lovell Anderson J (Pidgeon and Ipp JJ concurring) said: “The implied undertaking is binding upon anyone into whose hands the discovered documents come, if he knows that they were obtained by way of discovery”. And Ryan J said in Spalla v St George Motor Finance Ltd: “To be effective, the undertaking must bind the litigant by whom it is given and his or her privies.”
111. If this principle did not exist, the “implied undertaking” or obligation on the litigant would be of little value because it could be evaded easily. That is why Lord Denning MR said in Riddick v Thames Board Mills Ltd: “The courts should … not allow the other party – or anyone else – to use the documents for any ulterior or alien purpose. Otherwise the courts themselves would be doing injustice.” And in the same case Stephenson LJ also said: “[I]t is important to the public and in the public interest that the protection should be enforced against anybody who makes improper use of it.” Use with knowledge of the circumstances would be improper use.