All may be fair in love, war and litigation, but companies and individuals engaged in the litigation process need to remember that the use documents obtained in litigation via a compulsory process of the court (such as through disclosure or a subpoena) for any other purpose is prohibited and can lead to a finding of contempt against a person who misuses the documents or information.

The Harman Rule

The Harman rule stems from the UK House of Lords decision of Harman v Secretary of State for the Home Department (1983) 1 AC 280 which was adopted in Australia by the High Court in Hearne v Street.

In the Hearne decision, the majority of the High Court said:

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 disclosurecannot, without leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence.

The rationale for the rule has since been expressed as:

  1. encouraging a full and frank disclosure of documents by parties (British American Tobacco Australia v Cowell);
  2. protecting the balance of privacy and the compulsory nature of the court processes (Minister for Education v Bailey); and
  3. preventing abuse of the courts processes for an ulterior purpose (Liberty Funding Pty Ltd v Phoenix Capital).

It has been said that a collateral or ulterior purpose is one which differs from that which is the only reason why, under a procedure designed to achieve justice, one party is privileged to be in possession of another party’s documents.

The practical effect of the rule is that any information or documents obtained from affidavits, expert reports, orders for discovery or subpoenas should be treated as strictly confidential as between the parties to the litigation, their lawyers, any litigation funders, witnesses, experts and the court until such time as an affidavit annexing or exhibiting the document or information is read in open court, which usually only occurs at final hearing of a matter.

The rule extends to the courts, many tribunals and arbitration and is often not well understood by those who are not actively involved in litigation, who may consider that once a document is handed over it can be used for any purpose.

An undertaking to the court, even an implied undertaking, has the force at law of an injunction, and so a breach of an undertaking carries with it the risk of the party in breach being held to be in contempt of court.

Am I safe if I am not a party to the proceedings?

No.  The Harman rule is unique in that it attaches obligations to third parties who have merely received the documents or information, but who are not otherwise parties to the litigation in which the documents or information were disclosed.

This includes lay witnesses, experts, lawyers, litigation funders and anyone else who takes possession of the documents or information.  While there is a requirement that those third parties be on notice of the original source of the documents or information, they may be liable for contempt of court if they use the documents or information outside of the permitted use once aware of the source.

This is a broad obligation but it is necessary to prevent a party “leaking” documents or information to a third party who can then make use of them.

What if I really want to use the documents or information?

There are some steps that a party can take if they wish to use documents or information contained in affidavits in one set of proceedings for another purpose, including:

  1. By operation of law, such as when the documents are tendered in open court, when the implied undertaking ceases to have effect;
  2. By seeking leave of the court to rely on the documents, which is the usual course taken but usually which requires ‘special circumstances’ exist (see for example Springfield Nominees v Bridgelands Securities and our comments below);
  3. By asking the other side to waive the obligation to comply with the implied undertaking.  This is very unlikely to occur in practice but is still worth considering;
  4. By seeking orders that evidence in the proceedings where the document or information were provided be considered evidence in the proceedings where the document or information are sought to be used; or
  5. By issuing a subpoena or seeking disclosure orders to obtain the document or information in the proceedings where the document or information are needed.

While issuing a subpoena could be argued as breaching the implied undertaking rule, as the party issuing the subpoena may only know about the existence of a document or the contents of that document due to being provided it in other litigation (and hence subject to confidentiality under the Harman rule), we are not aware of any objections to subpoenas being upheld on those grounds and it would appear to be a difficult matter to prove.

It would seem unusual for a party to be barred from issuing a subpoena or seeking a category of documents in disclosure which would be relevant to the determination of the facts in issue solely because the existence of those documents were inferred from knowledge gained due to disclosure in other proceedings.

What will the court consider when deciding whether to relieve a party from the undertaking?

The most common path to avoid difficulties is to seek an order of the court to be released from the implied undertaking.  If such an application is brought, the court will consider matters including:

  1. the nature of the document and information in the document (for example how private and/or confidential the contents of the document are);
  2. the circumstances under which the document came into existence;
  3. any prejudice the author of the document may suffer if the document is permitted to be used for another purpose;
  4. whether the document pre-dated the litigation or was created for the purpose of litigation and hence was intended to eventually enter the public domain;
  5. how the document came into the hands of the party seeking leave to use the document; and
  6. the contribution of the document to achieving justice in the second proceedings (in Springfield Nominees this was called ‘perhaps the most important [consideration] of all’).

Conclusions

The implied undertaking/Harman Rule is a potential minefield for all parties to litigation if they depart from a careful approach to keeping  evidence and documents received from another party in that litigation strictly confidential until such time as the material becomes part of the ‘public record’ at final hearing.

In total’s digital environment this also extends to ensuring the security of IT systems storing such documents is as strong as possible to prevent unauthorised access to the material.

Recently an international law firm suffered a huge breach of security and it is likely that within the material leaked there will be material covered by the Harman Rule.  It will be interesting to see whether the Harman Rule is invoked in relation to the document leak.

If a party wishes to use documents obtained in one set of proceedings in another, careful consideration should be given to how that can be achieved so as not to run the risk of a contempt of court occurring.

First published at ERA Legal, reproduced with permission.