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Overlooking your e-disclosure obligations may cost you
02 March 2010

In the recent case of Timothy Earles v Barclays Bank, the court had to decide whether or not the Mr Earles had authorised the Bank to make certain transfers from his personal business account to his company account, or whether the defendant Bank had made various unauthorised transfers.

The Facts

Mr Earles claimed to have suffered loss and damage as a result of five transfers being made without his permission. The bank claimed to have been instructed by the claimant to make each of the transfers, by way of telephone calls made to their business centre.

This should have been a relatively straight-forward issue for the court to decide, but there had been a severe lack of disclosure on both sides, particularly as far as e-disclosure was concerned.

Neither party had produced relevant e-documents, but the Judge was particularly unsatisfied with the level of e-disclosure by the bank, which had not produced any telephone records or emails from personnel involved with the transfers at the business centre. It was accepted that the claimant’s lack of disclosure was probably due to him being a litigant in person, however the Judge was not so forgiving where the bank was concerned. Although the Judge accepted that the defendant’s lack of disclosure had not been a deliberate attempt to gain any advantage, the matter was not ignored.

The Decision

The court held that the transfers had in fact been authorised by Mr Earles, however the Judge was keen to emphasise that the level of disclosure was both unacceptable and below the expected standard. In particular there was no excuse for the disclosure deficiencies on the part of the bank - a large organisation with an experienced legal team. As a result of the bank's failure to comply fully with its disclosure obligation, specifically in relation to e-documents, their costs were reduced by 50%. In addition to this, a further 25% was deducted as it was felt that the defendant’s total costs claimed were too high for what was deemed a relatively simple issue.

This case highlighted the importance of a party’s need to fully observe and comply with its disclosure obligations, particularly e-disclosure. The Judge sent out a very clear message that partial disclosure is not acceptable and that the courts are ready and willing to penalise a party in costs where disclosure has not been adequate, whether deliberate or not.

For more information about how this issue affects you or to find out more about how the Dispute Resolution team can help you please contact the team on 0118 952 7206 or email [email protected].

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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