High Court: Bank granted leave to lodge tender on condition that discovery process is completed
The High Court has granted leave to Bank of Ireland to lodge a tender in proceedings on condition that the tender only becomes effective after the conclusion of the discovery process. The lodgement application had been made after the discovery process had begun and the bank claimed that it wished to avoid further litigation costs.
About this case:
- Citation: IEHC 86
- Court:High Court
- Judge:Ms Justice Siobhán Phelan
Delivering judgment in the case, Ms Justice Siobhán Phelan held that the bank would be conferred with a litigation advantage if it was allowed to lodge the tender prior to the conclusion of discovery. The plaintiffs had already outlined the documents that they were pursuing in discovery which created an “inequality of arms” between the parties.
Accordingly, the plaintiffs would have to assess the tender while being blind to the discovery documentation available to the bank, the court said. This was unfair and created an imbalance that was not present at other times when lodgements were permitted without the need for court approval.
The plaintiffs were suing Bank of Ireland Group plc, Expert Security Limited and David O’Toole for personal injuries, loss, negligence, breach of privacy and breach of confidence arising from allegedly unlawful disclosure of the plaintiffs’ details by the bank to the other defendants. Mr O’Toole was the father of the first plaintiff and the managing director of Expert Security.
The core of the claim was that Mr O’Toole was facilitated by the bank in tracking down the plaintiffs to Spain and England and engaging in a campaign of harassment. Specifically, the plaintiffs alleged that information which could only have been internally generated by the bank had been passed to Mr O’Toole.
Although the bank in its defence claimed that it was a stranger to many of the issues between the plaintiffs and Mr O’Toole, it was accepted that the documents identified were internal bank records. It was denied that any breach of duty had occurred in the case.
After the involvement of the Data Protection Commissioner, the bank acknowledged that it had “fallen short of the standards that you should have been able to rely upon” and sought to develop “a process for an amicable solution between the bank and yourself”. However, it was only after a summons issued in May 2020 that a proposed mediation date was mooted.
The mediation dated for July 2020 were ultimately aborted, although there was a difference of opinion between the parties as to why this occurred. The proceedings continued with the exchange of particulars and pleadings. There was extensive engagement during the discovery process, with letters of voluntary discovery exchanged.
However, before discovery was fully agreed and made, the bank filed a motion seeking leave to make a tender offer. Due to the timing of the tender, the bank was required to make an application to court pursuant to Order 22 RSC. The application was opposed on the grounds that there would be an unfairness to the plaintiff in permitting a tender where an attempt at mediation had not progressed and resulted in early disclosure by the plaintiffs of certain information.
Ms Justice Phelan began by outlining the principles derived from case law, which were not in dispute between the parties. It was noted that there was a strong public policy argument in favour of facilitating parties to settle proceedings rather than litigating them. This was true even if a lodgement offer was made at the eleventh hour (see Carpenter v Stoneavon Holdings Ltd  1 IR 367; Kearney v Barrett  1 I.R. 1; Ely v Dargan  2 I.R. 89).
However, a guiding principle on the grant or refusal of making a late lodgement was that a party should not gain an unfair litigation advantage (Carpenter v. Stoneavon Holdings Ltd). Some examples of special circumstances where an application might be refused were outlined in O’Mahony v. Hermann & Anor.  IEHC 9, which included a defendant (with mala fides) engaging in spurious settlement talks solely for the purpose of making a tight lodgement.
Further, where no special circumstances justifying a refusal were identified but a court apprehended a risk of unfairness, the court had a discretion to make a grant of leave condition on terms (Carpenter v. Stoneavon Holdings Ltd).
In applying the law to the facts of the case, the court noted that there was no rule in the Rules of the Superior Courts which stated that leave to make a lodgement should not be granted merely because the claim had been the subject of previous settlement negotiations or mediation. Further, the Rules also allowed tenders to be made without leave at certain points in proceedings, the court said.
The evidence before the court did not even allege mala fides on the part of the bank in relation to the cancelled mediation and as such the court could not make a finding that this amounted to a special circumstance. Accordingly, the court could not make a finding that the bank obtained a litigation advantage from this failed mediation.
However, as to the timing of the application, the court held that this did give rise to a potentially unfair litigation advantage. The plaintiffs had already “revealed their hand” in relation to discovery sought and the bank now had the opportunity to establish whether the requested documents would assist the plaintiffs in their claim.
In the circumstances, there was an imbalance in the parties respective levels of information which resulted from the timing of the application. The court noted that the plaintiffs would have to assess the tender while blind to discovery documents. This would require their legal advisors to provide “heavily caveated and sub-optimal” advice on accepting the tender. Accordingly, an unfair pressure would arise due to fear of costs exposure.
Although the court held that allowing the lodgement at this point would result in a risk of unfairness and inequality, the court also held that the issue fell short of being a type of special circumstance which justified refusing the application. Instead, the court decided that it would allow the application, subject to the lodgement only being effective after discovery had been completed.
In reaching this decision, the court had regard to the fact that exemplary and punitive damages were claimed in the proceedings, which underlined the particular importance of completing the discovery process. The court accepted that this condition would lead to further costs being incurred by the bank in discovery, but there was no other way to ensure that the bank was not given an unfair advantage in the case.
The court granted the application allowing the bank to lodge a tender on the condition that the tender would only become effective after the discovery process was complete.
Feely and Anor. v. Bank of Ireland Group plc  IEHC 86