The recent introduction into the Polish legal system of the possibility of applying for disclosure of evidence in the other party’s possession in cases alleging antitrust violations has stirred a debate over the treatment of evidence in Polish civil procedure. Should parties be given a broader right to demand production of evidence by the other side?
Since 27 June 2017 Polish civil procedure has provided for the possibility of applying for disclosure of evidence. With such an application, a party may demand that the court order the adversary to disclose relevant evidence in its possession, including in particular evidence unfavourable to the adversary—evidence that could undermine its claims or support those of the applicant.
For now such an application can be filed only in a narrow category of cases, involving claims for damages for violation of antitrust law. This solution was introduced by the Antitrust Claims Act (full title: the Act on Claims for Redress of Injury Caused by Violation of Competition Law of 21 April 2017). This act implements the Antitrust Damages Directive (2014/104/EU), which is intended to facilitate enforcement of private claims by parties injured by anticompetitive practices.
The solution imposed by the directive is modelled on procedures followed in common-law systems, where the right of litigants to demand that the adversary disclose and turn over potentially harmful evidence is regarded as a fundamental principle of civil procedure. In the United States this procedure is called “discovery.” It enables the parties not only to demand disclosure of relevant documents before trial, but also to require the adversary or affiliated person (e.g. employees) to submit oral testimony at pre-trial depositions. In England and Wales analogous aims are served by “disclosure,” a less invasive instrument than the American discovery but also ensuring the parties the ability to obtain access to relevant evidence in the adversary’s possession before trial.
Litigators in the UK or the US cannot imagine a fair civil trial without a procedure enabling examination of evidence in the other side’s possession. They refer jokingly to a procedure not providing for such a possibility as “justice undisturbed by facts.”
But in Poland the notion of an application for disclosure of evidence has generated serious controversy. Some commentators claim that it upsets fundamental principles of civil procedure and requires parties to give evidence against themselves.
Is that really the case? Should the newly introduced right to apply for disclosure of evidence really be that controversial? Should it be regarded as a peculiarity tolerated only in antitrust cases? Or is the introduction of this solution in Polish law a step in the right direction, consistent with the principles underlying modern civil procedure, which should be expanded to all types of civil cases?
Adversary principle and a party’s right not to provide evidence against itself
The issue of whether a party has the right to demand that the opponent disclose relevant evidence is sometimes erroneously viewed in light of the adversary principle. Hence opinions have been expressed in the legal literature of countries from the civil-law tradition that solutions applied in common-law jurisdictions permitting parties to demand that the court order their opponents to produce relevant evidence follow an inquisitorial spirit contradicting the essence of an adversarial proceeding.
But the adversary principle has little to do with this issue. This principle provides that it is up to the parties to present the allegations, evidence and arguments supporting their positions, and the role of the court is to hear the parties’ arguments and weigh the evidence they present. However, the fact that the court does not conduct an investigation in a civil case, and the parties are required to present their allegations and the evidence supporting their positions, does not mean that a party has a right to conceal relevant evidence from the adversary and refuse to provide access to the evidence. Under the adversary principle, a party must show the initiative in seeking and presenting evidence for its positions. But the party can demonstrate that initiative by seeking to obtain evidence under the opponent’s control.
Solutions in which the court assists the parties in obtaining evidence supporting their allegations but under the opponent’s control do not contravene the adversary principle, but reinforce it and help realise it more fully. It is precisely due to the adversary principle—because a party in a civil proceeding bears the obligation of presenting evidence to support its allegations—that the procedural rules must ensure a party the right to access evidence in the adversary’s possession. Otherwise the party’s ability to meet this obligation would be greatly limited.
There is no principle in civil procedure entitling the parties to refuse to present evidence unfavourable to them. Such right, which in any event has nothing to do with the adversary principle, is enjoyed by the accused in a criminal proceeding. It serves as a guarantee of protection of the individual in confrontation with the state in a criminal proceeding, when the individual’s freedom is at stake and the individual may be sentenced to severe sanctions in the public interest. In a civil proceeding, particularly in commercial disputes, the stakes and the mutual relations of the parties are different. The proceeding typically involves the mutual, private interests of the parties. Thus the parties to a civil trial do not enjoy a right to refuse to provide testimony unfavourable to themselves (unless the testimony could expose the party to criminal responsibility). The defendant (like the plaintiff) is required to testify if called by the opponent, and must testify completely and truthfully, even if that would ruin the chances for prevailing in the case. Unlike in a criminal trial, concern for the result of the case is not a justification for refusing to testify in a civil trial. As the plaintiff has the right to demand that the defendant testify even if the testimony would confirm the plaintiff’s allegations (and vice versa), why would there be no right to demand disclosure of other damaging evidence as well? Certainly the adversary principle presents no barrier.
True, manifestations can be detected in Polish civil procedure of a manner of thinking that views the defendant somewhat like the accused in a criminal trial. Suffice it to mention that the Civil Procedure Code generally places little weight on the testimony of the parties and requires that it be admitted only as a last resort. Nor does it allow a party to be compelled to testify, but only permits the court to draw a negative inference from the party’s refusal to testify. An example of this attitude is the view among civil procedure commentators that the defendant in a civil trial is not required to respond constructively to the plaintiff’s allegations and can simply deny them, hoping that the plaintiff fails to meet its burden of proof. Moreover, the court may not draw any inference from that, much as the court cannot draw any inference against an accused who remains silent in a criminal trial. But this attitude in a civil setting is unwarranted, and certainly inconsistent with the principles underlying a modern civil trial. In jurisdictions perceived as the most efficient at resolving commercial disputes and enjoying the greatest popularity and renown among businesses who are parties to such proceedings, there is no longer any doubt that the parties to a civil proceeding are required to contribute constructively to clarifying the circumstances of the matter. Of course, it is up to each party to formulate its position and the precise factual allegations supporting it. But each party has a right to access information and evidence that could support the correctness of its position, regardless of who exercises control over that evidence.
This is the context in which the institution of the application for disclosure of evidence introduced into the Polish legal system via Directive 2014/104/EU should be viewed.
Inadequacy of existing legal solutions
The Polish Civil Procedure Code has always provided for the possibility of requesting the court to order the opponent to submit a document to the case file. But courts have interpreted this institution restrictively, requiring that the document be precisely described and identified, and that its direct relevance to the case, not merely its potential relevance, be precisely demonstrated and explained. Consequently, this institution has generally been useful only to obtain a document from the opponent when the party has already seen the document and knows its content. Thus it has not served to obtain a defined category of documents which the party was not certain existed but could reasonably be expected to exist, and could reasonably be assumed to be relevant to the dispute (such as internal correspondence in the adversary’s organisation concerning a certain issue relevant to the case). Similar restrictively interpreted solutions exist in other countries of Continental Europe.
But in England and Wales, for example, under the disclosure system, at a preliminary phase of the case the parties are required to prepare and exchange lists of all documents in their possession that could be relevant for assessment of the truth of disputed factual allegations, together with an explanation of how such evidence was selected. Then each party has the right to inspect the documents on the list. The other party may also seek to broaden the scope of the search for relevant documents, appealing to the court if the parties cannot agree. Finally, each party has the right to decide which documents obtained from the opponent it will offer as evidence in its case.
When seeking to boost the effectiveness of private enforcement of antitrust law, European lawmakers found that the solutions functioning in countries of Continental Europe, like those in the Polish Civil Procedure Code, are too limited and ineffective. They do not ensure persons injured by infringements of competition law the sufficient ability to protect their rights when pursuing claims for redress of the injury caused by such actions. Thus the directive required the member states to adopt solutions similar to those that have been proven over many years in common-law jurisdictions (particularly England and Wales), i.e. solutions permitting the parties to demand from each other not only individually identified documents, but whole categories of documents, so long as the documents could be relevant to the case and the demand is reasonable and proportionate under the circumstances of the case.
Conditions for proper functioning of this new instrument in the Polish legal system
The proper functioning of this new instrument in the Polish legal system will depend on the same conditions for its effectiveness in common-law jurisdictions.
First it will be necessary to combat abuses of this new tool. Critics of English disclosure, and particularly the more extensive American discovery, argue that these procedures are sometimes used by parties not only to seek evidence for specific and reasonable factual allegations, but to seek the very basis for their claims—picking a defendant and then using the courts to conduct an investigation to find if there is any basis for any claims against the entity. Lawyers in English-speaking countries refer to such demands as “fishing expeditions.” They constitute a prohibited abuse of procedure. It is important for Polish courts to quickly learn to identify and condemn such practices. The basis for this could be Art. 21(2)(3) of the Antitrust Claims Act, which authorises the court to deny an application if it aims at “a general search for information that is unlikely to be relevant to the proceeding.” Another useful tool could be the possibility provided for in Art. 28 of the act of imposing a fine for applications for disclosure of documents filed in bad faith and for misuse of information obtained through this procedure.
In cases with complicated facts and voluminous potential evidence, the procedure for disclosure of evidence may prove highly time-consuming and costly. The act authorises the court to examine at the stage of ruling on the application whether the application is proportionate, i.e. whether granting the application would impose unnecessary or excessive burdens on the other party (Art. 21(1)(3) and 21(2)(1)–(2)). But the courts should have means at their disposal to impose cost sanctions not only for filing applications for disclosure of documents in bad faith, but also for filing such applications which only at a later stage prove to be disproportionate, unnecessary or unwarranted. Unfortunately, under current law the courts’ abilities in this respect seem very limited, unless they were to boldly and purposely interpret the notion of an application filed in bad faith to cover the negative examples mentioned above, imposing in such cases the sanctions provided for in the act. The cost sanctions available to the courts in common-law jurisdictions are much more severe and serve as a significant instrument in combating abuses of the procedure for disclosure of evidence.
The quality of the pleadings drafted by counsel will also be crucial for the proper functioning of this new instrument. The disclosure procedure works smoothly in the UK largely because the substantive pleadings there are drafted by counsel in a manner enabling the court to easily identify the fundamental elements of the parties’ positions and identify the key disputed issues. The pleadings there are concise, written in precise language, shorn of emotion and generalities. They clearly distinguish the fundamental facts from the secondary circumstances which only provide additional backing for the central thesis. Factual allegations are asserted in a manner clearly leading to precisely defined, understandable legal conclusions. Elements of the facts that are unclear, stated in a manner that is not understandable or carefully considered, to prevent possible preclusion or “just in case,” to leave the option of drawing different legal conclusions in the case, are rejected from the start as abusive. Thanks to this intellectual discipline, it is easy to determine whether factual issues are genuinely disputed between the parties and relevant to the dispute, and consequently what evidence should be subject to disclosure.
Another important issue for the effectiveness of this new institution will be whether courts are in a position to effectively protect the parties’ confidential information within the disclosure procedure. A party required to disclose evidence must have the right to refuse to turn materials over to the adversary if it could prejudice the party’s legally protected confidentiality. Otherwise, this institution will face the justified resistance of the parties.
The way this problem is resolved in the English disclosure procedure is that the parties preparing a list of the relevant documents in their possession indicate which of them are covered by confidentiality and the basis for the privilege. If the parties nonetheless disagree on whether a given document should be disclosed, the court will rule on whether the protection of the given type of confidentiality requires denial of the application by the party seeking disclosure (or some other solution protective of the privilege should be employed, such as providing a redacted version of the document). The Polish Antirust Claims Act enables the court to protect the secrets of a party ordered to disclose evidence by way of examination of the proportionality of the application (Art. 21(2)(4)). On this basis, the court may find that the need for protection of the respondent’s confidentiality requires denial of the application in whole or part. The act also enables the court to apply measures necessary to protect the respondent’s confidentiality when disclosing documents, e.g. by laying down specific rules for examination and use of the evidence, or prohibiting copying or recording of the document (Art. 23).
Finally, perhaps the most important issue for the success of the new institution will be whether failure to comply with the court’s decision ordering disclosure of evidence draws an appropriate sanction. In common-law jurisdictions, concealing or destroying evidence subject to disclosure is treated very seriously. It can constitute contempt of court, leading to imposition of severe criminal sanctions. Counsel thus have a significant ethical obligation to instruct their clients on the duty to maintain, protect and disclose relevant evidence. Any violations in this respect are treated harshly.
The Polish Antitrust Claims Act does not provide for any specific sanctions for nondisclosure or destruction of evidence subject to disclosure. Under the act, in such situation the court may draw a negative inference (i.e. the facts that were to be proved using the evidence in question are deemed to be established). The court may also charge the costs of the proceeding to a party guilty of concealing or destroying evidence. The justification for the act suggests, however, that the lawmakers assumed that in appropriate instances, sabotaging of the procedure for disclosure of evidence can result in criminal responsibility. This would be the case if a party conceals or destroys evidence covered by an order to disclose evidence. The drafters of the act stated in the justification that such an action could constitute the offence defined in Art. 276 of the Criminal Code, i.e. concealment or destruction of a document which the party does not have the exclusive right to dispose of.
To ensure the effectiveness of this new institution, the importance of proper cooperation between counsel, and between counsel and the court, cannot be overstated. In courts in common-law countries, as in arbitration proceedings, the disclosure of evidence typically occurs without the involvement of the court or tribunal. It will generally intervene only if a dispute arises between the parties, for example over whether a given category of documents should be subject to disclosure or defined more narrowly. An interesting source of solutions in this respect is international arbitration practice. For example, in the document production procedure, for years international arbitration has successfully used the “Redfern Schedule”—a simple tool involving a single document where the applicant defines the category of documents whose disclosure it seeks, the opponent asserts any objections it may have, and the arbitral tribunal, if necessary, issues a decision on the final scope of the evidence subject to disclosure. With the new Polish institution of the application for disclosure of evidence, customs and best practice will also have to develop to guide its use. In this respect, much will depend on the professionalism of counsel and their constructive cooperation with the court.
The application for disclosure of evidence certainly represents a major innovation in the Polish legal system. However, the regulations governing this institution are not sufficient in themselves to ensure its proper functioning. They must be reinforced by the case law and practice responding to issues that will no doubt arise in the application of this institution. Introduction of this new institution thus presents a serious challenge for lawyers and judges.
But an application for disclosure of evidence is certainly not an instrument inconsistent with the principles of Polish civil procedure. To the contrary, the existing, outdated perception of the role of the parties, particularly the defendant, in the production of evidence is irreconcilable with those principles. There is no barrier to adopting solutions similar to the application for disclosure of evidence, currently limited to antitrust cases, in other civil proceedings as well. It is hard to justify why persons injured by practices infringing competition law should be able take advantage of this institution and persons injured by other tortious acts or breaches of contract, who may face equal difficulty proving their claims, should be deprived of this right.
Until lawmakers introduce appropriate solutions, reflections on this new institution could influence the interpretation and application of existing legal solutions, for example leading to bolder and more flexible use of Civil Procedure Code Art. 248 by the courts.
Stanisław Drozd, Dispute Resolution & Arbitration practice, Wardyński & Partners