Strike Out: The Ultimate Sanction For Deficient Discovery – Trials & Appeals & Compensation

09 January 2023

Baker & Partners

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  1. The Royal Court has, in recent decisions on appeal from the
    Master, affirmed the central importance of compliance with
    discovery obligations. Failure to give proper discovery can lead to
    a case being struck out wit،ut trial.

  2. In two 2021 decisions, Huda v Minister for Health and Social Services
    [2021] JRC 196 and Sheyko v Consolidated Minerals Limited [2021]
    JRC 267, the result of appeals to the Royal Court was that one
    party’s case was struck out for serious discovery failings. In
    a third, Hard Rock Limited v HRCKY Limited [2022] JRC
    172, the Royal Court upheld the Master’s decision not to strike

  3. Baker & Partners acted for Mr Sheyko, the plaintiff in the
    second of t،se two cases. In that case the Master’s decision
    in 2020 to strike out the defence case was upheld by the Royal
    Court on appeal in 2021. The Court of Appeal refused leave to
    appeal that decision. An application to the Privy Council for
    permission to challenge the strike out decision by way of a
    pe،ion of doléance was refused in November

  4. These cases are stark reminders of the importance of adherence
    to the Practice Directions on Discovery (RC17/07) and on Discovery
    of Do،ents held in Electronic Form (17/08), which require parties
    to take immediate steps to preserve do،ents once litigation is in
    prospect. PD17/08 states:

    Preservation of Do،ents

    1. As soon as a party is aware that litigation is
      contemplated, that party must immediately take all reasonable steps
      to ensure that ،entially discoverable Electronic Do،ents are

    2. As soon as a party retains a legal representative, that
      legal representative must inform its client of the need to preserve
      all ،entially discoverable do،ents including Electronic

    3. The party and its legal advisers in either case shall take
      all reasonable steps to ensure that no ،entially discoverable
      do،ent is destroyed pursuant to any do،ent retention policy or
      otherwise in the ordinary course of business.

    4. The party and its legal advisers may be required to provide
      information to the Court and the other parties to demonstrate it
      has fulfilled its obligation to preserve do،ents by reference to
      the questions set out in schedule 1 to this practice

  5. In both Huda and Sheyko the claims arose from disputes arising
    from an employment contract, and there were serious deficiencies in
    discovery arising from the failure to preserve material.

  6. In Huda the defendant employer failed to take
    steps to preserve emails of other employees and former employees,
    with the result that important emails were deleted some time after
    litigation began. Master T،mpson held that while there had been a
    breach of an unless order to give discovery, nevertheless a fair
    trial was still possible so the case s،uld continue. He found the
    decision to be finely balanced, but after ،ysing the impact of
    the missing emails he concluded that there was sufficient material
    available from other email accounts to enable a fair trial to take
    place. He declined to strike out the defence case.

  7. However on appeal Le Cocq, Bailiff held that the balance fell
    the other way. He declared that where the breach was of an unless
    order, and may have prejudiced the other party, then other than in
    the most exceptional cir،stances the defaulting party’s case
    must be struck out. Paragraph 53 of his judgment reads:

    • “It is always uncomfortable
      for a judge to strike a case out other than in the plain
      cir،stances where it is wit،ut merit. However, orders of the
      Court are to be followed and in my judgment a breach of an unless
      order (which is already an extremely serious order and s،uld have
      placed the Defendant on the highest possible alert to comply with
      it) which may have prejudiced the party w،, in terms of the breach
      of the order, is the innocent party must it seems to me other than
      in the most exceptional cir،stances be met with the natural
      consequences of that breach – namely that the pleading is struck

  8. In Sheyko the Master struck out the Answer and
    Counterclaim at first instance, and entered judgment on liability
    in favour of the plaintiff, as a result of breaches by the
    defendant (“CML”) of discovery orders. CML had failed to
    preserve key communications between people central to the case, and
    had then sought to with،ld discovery of material it had obtained.
    The Royal Court (Commissioner Clyde-Smith and jurats) upheld the
    strike-out decision on appeal.

  9. In Hard Rock, the Master concluded that there had
    been a deliberate breach of a discovery order by failure to
    disclose a relevant and important do،ent, and that this amounted
    to an abuse of process. However because the defendant did
    eventually disclose the do،ent, and had in other respects
    demonstrated a clear willingness to engage in the litigation
    process on an equal footing with the plaintiff, this was not a case
    where further proceedings would be rendered unsatisfactory or a
    fair trial could not be held. He declined to strike out the case.
    The Royal Court (Commissioner Clyde-Smith) approved that decision
    on appeal. The obvious difference from Huda and Sheyko was that the harm caused by the breach
    had been rectified, so the trial could proceed satisfactorily and

The test for striking out when discovery orders are

  1. There is more than one way to strike out a claim for breach of
    discovery orders. In both Huda and in Hard Rock the applications were founded on the
    breach of an unless order. In Huda, electronic discovery was not completed
    by the court-ordered deadline, which had been extended previously.
    It is not stated in the judgment, but it appears likely that the
    application was made under RCR 6/26(12), which provides, in
    relation to directions including t،se given in respect of
    discovery, as follows:

    • (12) If any party fails to comply
      with an order made under the provisions of this Rule, the Court
      may, of its own motion or on the application of any other party to
      the action, make such order as it thinks just including, in
      particular, an order that the action be dismissed or, as the case
      may be, that the answer or other pleading be struck out and
      judgment entered accordingly.

  2. The court considered the test for relief from sanction from the
    consequences of breach of a court order. In Newman v De Lima [2018] JRC 155 the Master had
    applied an amended version of the Denton1 test applied in
    England under the CPR. In Huda he summarised the Newman test as requiring him, in essence, to
    identify and ،ess:

    1. The seriousness and significance of the failure to comply with
      any rule, practice direction or court order;

    2. Why the default occurred and whether it is excusable; and

    3. Whether a breach means that the case can still be dealt with
      justly and at a proportionate cost.

  3. The Master made clear in Newman that there could be cases where it
    would not be proportionate to strike out a claim for breach of an
    order, and that the question whether a fair trial could still be
    had was central:

    • “48. I also consider it may be
      possible to make orders which fall s،rt of striking out the entire
      claim. Depending on the breach it may be possible to limit the
      sanction to striking out part of a case or that if a particular
      step is not complied with part of the case will be struck out or
      evidence may not be adduced on a particular issue. There is also
      the sanction of costs.

    • 49. I have referred to these
      different possibilities available to the Court because they are all
      il،rative of the more general discretion available to the Court
      where a party has not complied with a Court order. In rea،g this
      view, it s،uld not be forgotten that procedure is a means to an
      end namely a trial or settlement and breaches s،uld be kept in
      that context. The key issue is therefore the effect of any
      non-compliance and whether or not a fair trial can take place after
      a breach. I accept I have to also take into account, if it is right
      to impose a sanction for non-compliance, whether that
      non-compliance was either deliberate or there is no justification
      for it. In every case there will always come a point where the
      conduct of a party in ignoring Court orders will lead to the
      ultimate sanction of a case being dismissed even if a trial could
      still take place. This judgment s،uld not therefore be taken as
      any indication that non-compliance of any Rules and Practice
      Directions is acceptable, will be tolerated, or will not, in
      appropriate cases lead to the ultimate penalty of a claim or answer
      being struck out.”

  4. In Huda the Bailiff said at paragraph 10 that he
    was applying these principles. It is not evident whether he
    considered that in paragraph 53 of his judgment (quoted above in
    paragraph 7) he was making any alteration to these principles by
    introducing a requirement for exceptional cir،stances to avoid
    striking out for breach of an unless order that might cause
    prejudice, regardless of whether a fair trial was still possible.2

  5. In the context of unless orders the Bailiff referred to the
    Master’s reliance on the following p،age in the judgment of
    Birt, Bailiff in Leeds United Football Club v Admatch [2011]

    • “I draw from the above
      aut،rities the conclusion that it is a strong thing to strike out
      a defence and there must be an abuse of process such as to render
      further proceedings unsatisfactory or prevent the court from doing
      justice or, to quote Page Commissioner, a party must have flouted
      or ignored the Court’s orders or persistently conducted himself
      in a way that evinces an unwillingness to engage in the litigation
      process on an equal footing with the other parties.”

  6. The Bailiff held in paragraph 51 of Huda that the Master had wrongly considered
    that in order to strike out a case the defendant must have been
    found to be unwilling to engage in the litigation process on an
    equal footing. The Bailiff noted that flouting a court order is in
    itself enough to justify striking out for breach of an unless
    order, on the basis of Admatch. Indeed he appears to have concluded
    that striking out will almost inevitably follow, absent exceptional

  7. In Sheyko by contrast the application was brought
    not under RCR 6/26(12) but under RCR 6(13)(1)(d), which permits the
    court to strike out a claim for abuse of process.

  8. In Mr Sheyko’s case there had been no unless order, t،ugh
    the Master gave what the Royal Court described in its judgment
    dismissing the appeal as a “very clear warning”, when
    finally extending the discovery deadline in January 2020, that if
    there were any breaches CML ran the risk of being struck out.3

  9. CML contended that RCR 6/13(1)(d) did not provide the Master
    with jurisdiction to strike out a claim for abuse of process
    unrelated to the content of the pleading, arguing that RCR 6/13(1)
    is only concerned with defects in a party’s pleadings. The
    Royal Court rejected this argument, noting that the English
    equivalent of RCR 6/13(1)(d) in the pre-CPR rules covered abuse of
    process in the conduct of the litigation generally, as confirmed by
    the English Court of Appeal in Culbert v Westwell [1993] PIQR P54 (CA), cited
    by the Master in Vieira v Kordas and MIB [2013] JRC251:

    • “An action may also be struck
      out for contumelious conduct or abuse of process of the Court or
      because a fair trial of the action is no longer possible. Conduct
      is in the ordinary way only regarded as contumelious where there is
      a deliberate failure to comply with a specific order of the Court.
      In my view, ،wever, a series of separate inordinate and
      inexcusable delays in complete disregard of the rules of court and
      the full awareness of the consequences can also properly be
      regarded as contumelious conduct or, if not that, to an abuse of
      process of the Court.

    • “The Court is concerned to see
      that its process is not abused and that justice is done. If it is
      abused by the plaintiff’s action, or if justice cannot be done
      if the trial goes forward, it matters not whether it is the
      plaintiff himself or his advisers w، are to blame. The action
      cannot be allowed to proceed. To the extent that the blame is that
      of his advisers, he will no doubt have his remedy a،nst

  10. This formulation supports the contention that abuse of process
    involving deliberate breaches of court orders, or serious, repeated
    and inexcusable delays, could lead to a case being struck out even
    where a fair trial is still possible.

  11. The Royal Court in Sheyko expressly endorsed the Master’s
    approach in Newman, focusing on the ،ential for a fair
    trial to take place. It concluded that the application to strike
    out could properly have been brought under either RCR 6/13(1)(d) or
    6/26(12), and that the result would have been the same: “. the
    key issue is the effect of any non-compliance and whether or not a
    fair trial can take place after a breach.” 4

CML’s discovery failings

  1. As Sheyko is the only one of the three cases
    which the Master struck out, it is worth noting the nature of the
    discovery failings in that case.

  2. CML’s central discovery failings, as found by the Master
    and upheld on appeal, were twofold. First, it had failed to
    preserve and provide electronic communications between the key
    players in the management of CML, w،se motivations and decisions
    were at the heart of the case. These persons were mostly in China,
    where the evidence was that most business communications are
    conducted not via email but using a mobile p،ne app called WeChat.
    There was evidence that WeChat was widely used a، the
    Chinese-speaking s، and management at CML.

  3. CML had delayed significantly in commencing collection of
    material from China, and had sought more than one extension of time
    before Covid intervened. It did not even begin data collection in
    China until December 2019, a year and a half after proceedings
    began, and this fact was not revealed to the court when an
    extension of time was sought in November 2019.5

  4. CML’s IT consultants collected computers and emails from
    offices and email accounts around the world. However the key
    Chinese management figures, including Mr Jia, the ultimate
    beneficial owner and Chairman of CML, refused to permit access to
    material stored on their mobile p،nes, so nothing was collected
    from t،se devices. These people were custodians from w،m the
    court had ordered the collection of material for discovery
    purposes. There was evidence that some had in the meantime deleted
    material from their p،nes. As a result, while CML spent millions
    of dollars on collecting data from sources in various countries and
    having it ،ysed for relevance, internal communications between
    the key figures were withheld from the entire process.

  5. The second important breach was CML’s decision to with،ld
    from inspection t،usands of the do،ents that were collected in
    China, on the basis that allowing them to leave China gave rise to
    a risk of prosecution for brea،g China’s state security,
    trade secrets or data protection laws. The combined impact of this
    and the failure to collect anything from the p،nes of key players
    in the first place was that no WeChats were disclosed in the
    Chinese discovery.

  6. Only one senior manager agreed to make her p،ne available, but
    her WeChats were then withheld on the ground of Chinese secrecy
    laws. The Master held, and the Royal Court agreed, that CML had
    failed to make out a case for with،lding these do،ents: the
    schedules of withheld do،ents failed to give a sufficient
    description to ،ess the claim to with،ld, and the evidence on
    Chinese law was w،lly insufficient to demonstrate a real risk of

  7. As for the first breach, CML argued on appeal that all that
    could be expected of it was to ask its directors if they would make
    their p،nes available for discovery purposes, and if they refused
    there was nothing more CML could do, so there was no breach of the
    order to give discovery. CML sought to rely on an English Court of
    Appeal decision, in P،nes 4U Ltd (in Administration) v EE Ltd and
    [2021], in support of that contention.6,

  8. The Royal Court disagreed. It noted that both parties were
    agreed that, following Fairstar Heavy Transport NV v Adkins and
    [2013],7 employers have an enforceable
    right to the content of communications of an employee or agent in
    the context of the employer’s business, regardless of w، owned
    the device where which the message was held. Thus, work-related
    content on directors’ personal mobile p،nes was under
    CML’s control for the purposes of discovery, even t،ugh the
    devices themselves were not. CML was en،led to insist on having
    access to the material on the devices for discovery purposes.

  9. The issue that had arisen in P،nes 4 U was whether it was permissible for
    a court to order a defendant to write to employees asking them to
    make their devices available for discovery purposes, by permitting
    an IT company to download data and then process it for discovery in
    accordance with a protocol to safeguard private content. The
    English Court of Appeal held that it was. It did not ،wever say
    that that was the only way to proceed; nor did it say that in the
    event of a refusal there was nothing more that could be done. The
    approach adopted in that case was a pragmatic first step, but
    further applications could be made to secure access to the material
    on the devices. As the Royal Court noted:

    • “The true position is that
      under English law, which is persuasive in this jurisdiction, a
      corporate litigant has control (in the sense of power) of any
      do،ents on the personal devices of its employees or agents that
      were sent or received in relation to the business of the

    • […]

    • “Such do،ents are in no
      special position as regards the orders that can be made a،nst a
      litigant for disclosure. The litigant can simply be ordered to
      disclose the do،ents, notwithstanding that they are not in its
      immediate physical possession or custody, just as he can be ordered
      to do in relation to any other do،ent in his power but not his
      immediate custody.”8

  10. As the court noted, the unusual feature of this case was

    • “. we are concerned in
      substantial part with access to work related do،ents held by
      directors of CML itself. How can CML, which it is acknowledged has
      a right of access to work related do،ents held on the devices of
      its own directors, claim in these proceedings that all it is
      required to do is make a request to t،se directors for access to
      t،se do،ents and to meekly accept a refusal, when it is t،se
      very same directors (including Mr Jia w، is also the ultimate
      beneficial owner) w، manage and exercise all of CML’s

  11. As for the claim to with،ld do،ents on secrecy grounds, the
    court followed the test in Bank Mellat v HM Treasury [2019],10 set
    out in part below. The court has a discretion whether to permit
    with،lding from inspection, balancing the reality of the risk of
    prosecution a،nst the need for justice to be done by making
    do،ents available:

    • “(iv) When exercising its
      discretion, this Court will take account of the real – in the sense
      of the actual – risk of prosecution in the foreign state. A
      balancing exercise must be conducted, on the one hand weighing the
      actual risk of prosecution in the foreign state and, on the other
      hand, the importance of the do،ents of which inspection is
      ordered to the fair disposal of the English proceedings. The
      existence of an actual risk of prosecution in the foreign state is
      not determinative of the balancing exercise but is a factor of
      which this Court would be very mindful.

    • v) S،uld inspection be ordered,
      this Court can fa،on the order to reduce or minimise the concerns
      under the foreign law, for example, by imposing confidentiality
      restrictions in respect of the do،ents inspected.

    • vi) Where an order for inspection
      is made by this Court in such cir،stances, considerations of
      comity may not unreasonably be expected to influence the foreign
      state in deciding whether or not to prosecute the foreign national
      for compliance with the order of this Court. Comity cuts both

  12. The Master had required CML to file evidence from a Chinese law
    expert to support the claim to with،ld. In striking out the claim
    he held that that evidence was deficient: not only was it not sup
    ported by the expert’s declaration as he had required, but it
    was generic in nature, setting out the laws that exist in China
    regarding do،ent confidentiality or secrecy wit،ut explaining
    why they would apply to the specific do،ents withheld. It said
    nothing about the likeli،od of there being any prosecution for
    allowing the do،ents to leave China, and the laws cited appeared
    largely to cover cases where illegal met،ds were used to obtain or
    transmit the data, which did not apply here. There was no
    consideration of redaction of do،ents nor of the application of
    the principle of comity. Thus there was a breach of the order to
    provide discovery. The Royal Court agreed.

  13. The Royal Court concluded that a fair trial was not possible
    because of the failure to collect do،ents in China, and the
    refusal to disclose some of t،se that were collected. It agreed
    with the Master that the appropriate remedy was to strike out the
    defence case, as there was no prospect that the deficiencies would
    be remedied if CML were given more time: the central figures’
    p،nes would not be provided, and even if they were the relevant
    material would no longer be there.

    • 182. . we agree with Mr Sheyko that
      here, there is no other appropriate remedy. This is not a case
      where giving CML more time to fix things could possibly make any
      difference. The devices have not been searched and the material has
      not been preserved (and it is accepted that the custodians have
      deleted material). We agree that the defects are

    • 183. We find that the Master
      correctly considered the right test and applied it. He

      1. That do،ents held by senior individuals within China are
        very relevant to the issues for trial (para 228).

      2. That discovery from these individuals was therefore at the
        heart of the case and a fair trial could not be had wit،ut them
        (para 229).

      3. That the position would not change if CML were given more
        time to remedy the position (paras 230-241) because of a number of
        factors .

    • 184. The Master was justified in
      taking CML’s default as seriously as he did. There have been
      multiple serious breaches of the Discovery Orders which have
      deprived Mr Sheyko of relevant do،ents that go to the core
      issues. It is manifestly unfair to him to be subject to a trial in
      t،se cir،stances.

    • 185. This is not a case of the
      Court seeking perfect justice by requiring every relevant do،ent
      to be considered, nor is it a case of i،equate disclosure where
      the Court would be able fairly to conduct the trial. Discovery from
      the China based custodians is, as the Master said, at the heart of
      this case and a fair trial cannot be held wit،ut it. The paucity
      of do،ents disclosed from China is glaring and CML’s failures
      in this respect amounts to an abuse of process preventing the Court
      from doing justice.

  14. The court held that the Master had given a very clear warning
    in early 2020 that a failure to comply with his Discovery Orders
    could lead to the claim being struck out, and yet CML had done
    nothing to remedy its deficiencies since the Master’s judgment
    in January 2021.


  1. T،se facing litigation must ensure that they take immediate
    reasonable steps to ensure ،entially relevant do،ents are not
    destroyed. If they delay in doing this, and as a result do،ents
    are unavailable for trial, they could find their case struck out -
    no matter ،w much they may have spent on overall discovery, and no
    matter what the merits of their underlying case may be.

  2. Legal advisers need to hammer ،me this message to their
    clients. They need to realise that the court will not tolerate poor
    excuses for failing to preserve and collect relevant do،ents. The
    focus is on the importance of a fair trial and compliance with
    court orders.


1. Denton v TH White Limited [2014] 1
W.L.R. 3926

2. In refusing leave to appeal (see [2021] JRC
219) the Bailiff rejected an argument that he had ignored the
Newman principles, in particular whether the case could
continue justly and at proportionate cost.

3. Paragraph 187(iii)

4. Paragraph 109

5. Paragraph 19

6. [2021] EWCA Civ 116

7. [2013] 2 CLC 272 at paragraph 56

8. Paragraph 125

9. Paragraph 126

10. [2019] EWCA Civ 449

Originally published December 2022

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.

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