The test for getting an imaging order

Nix is part of a growing consensus that slightly less compelling evidence may be required to obtain an imaging order than is required for a search order.

In TBD (which was covered in the article by Niran de Silva KC and Sam Neaman in the April 2024 edition of ELA Briefing), the Court of Appeal approved the use of imaging orders (an order that requires a defendant to permit a forensic computer expert to make a complete copy of their electronic devices) as a less intrusive alternative to a search order (an order that requires a defendant to allow the claimant’s representatives to enter their premises and search for, copy and remove documents).

Since then, there has been some debate over the relevant threshold for granting an imaging order, with a degree of inconsistency appearing in the authorities.

In the recently published judgment of Nix, HH Judge Pelling KC expressed support for the view that the grounds for granting an imaging order are slightly less stringent than for granting a search order. He also identified the factors that are likely to be most relevant to obtaining an imaging order where the complaint is of unacceptable conduct in relation to disclosure and/or the preservation of documents.

The facts
HH Judge Pelling provided very limited details of the facts of the underlying claims in the case, taking the view that it was not appropriate to set these out in a judgment given on a without notice application.

As a result, all we are told is that the defendant, Alexander Nix, was the director of a company or companies which have been subject to insolvency proceedings and that the claimants are assignees of various causes of action from the insolvency practitioners.

The facts that gave rise to the claimants’ application for an imaging order were as follows.

Mr Nix had been provided with a work laptop by the companies. When the relationship between Mr Nix and the companies was ‘severed’, Mr Nix not only deleted all the data on the laptop before returning it, but also conducted a process known as ‘zero filling’. This renders it practically impossible to retrieve data (in a way that deleting files does not). The ‘zero filling’ was done after litigation was in contemplation and, consequently, after Mr Nix should have been aware of his obligation to retain all relevant documentation.

Litigation was subsequently started and directions for disclosure were made. Following disclosure, the claimants’ solicitors wrote to Mr Nix’s solicitors criticising what had been provided and essentially asking that the exercise be redone. In particular, the claimants asked that relevant SMS, WhatsApp and Facebook Messenger communications be reviewed and disclosed.

Mr Nix’s solicitors responded with what the judge described as ‘distain’, stating that there were ‘no additional sources of documentation to disclose or search’.

After this correspondence, Mr Nix was subject to public examination as part of the insolvency proceedings. During that examination, Mr Nix said he could not remember if he was using WhatsApp at the relevant times.

Prompted by this, the claimants’ solicitors made contact with another former director of the companies, who provided the claimants with WhatsApp messages he had exchanged with Mr Nix. The claimants’ solicitors ran these through an e-discovery platform programmed with the relevant search parameters, which identified many of the messages as ‘disclosable’.

As the judge noted, this indicated that there was a realistic possibility that other relevant WhatsApp messages had not been disclosed by Mr Nix. There was also a realistic possibility that these messages would still be stored on Mr Nix’s current or former mobile phones or on the cloud storage facility of WhatsApp. Consequently, there was a strong prima facie case that, notwithstanding Mr Nix’s assurances, he had not carried out the disclosure exercise as he should have done.

The principles
HH Judge Pelling started by reiterating (as per TBD) that any order that deprives a litigant of the opportunity to consider whether or not to make any disclosure is ‘an intrusive order’, which is ‘contrary to the normal principles of justice’. As a result, imaging orders (like search orders) should only generally be made after a party has been given the opportunity to comply with their disclosure obligations and failed to do so.

HH Judge Pelling went on to state that simple failure to comply with disclosure obligations will not by itself be sufficient to justify an imaging order; there needs to be ‘aggravating factors’. In this case, those were present in the form of Mr Nix’s disdainful reply to the claimants’ request to reconsider the disclosure exercise, the ‘zero filling’ of the laptop and the apparent inconsistency between the unequivocal assurances provided by Mr Nix that he had disclosed all relevant messages and the provision of relevant WhatsApp messages from another source.

The judge then considered the divergence between Hyperama and Garofalo. In Hyperama, Pepperall J articulated five criteria for determining an application for an imaging order, the first of which was whether there was ‘a high degree of assurance’ that the applicant would be able to establish their claims at trial. Pepperall J suggested that this was ‘not significantly different’ from the equivalent criterion for granting a search order (establishing an ‘extremely strong prima facie case’) but acknowledged less is required to justify an imaging order because it is ‘less invasive’.

In contrast, in Garofalo, Ms Caroline Shea KC, sitting as a Deputy Judge of the Chancery Division, had suggested the approach to granting an imaging order should be essentially the same as to the approach to granting a search order. HH Judge Pelling did not doubt the correct decision had been made in Garofalo itself, but as a matter of principle preferred the approach in Hyperama.

So, as regards that criterion, HH Judge Pelling has added weight to the view that the threshold for granting an imaging order is slightly lower than for granting a search order. However, HH Judge Pelling went on to emphasise that this criterion is not the only or even the determining factor as to whether an imaging order should be made. The ultimate touchstone is where the balance of injustice lies in light of the injustice each party is likely to suffer should the order be granted or refused respectively.

The other four criteria identified in Hyperama (whether the damage to the applicant’s business interests is very serious; whether there is clear evidence the defendants have incriminating documentation in their possession; whether there is a real possibility the defendants might destroy such material before any inter partes hearing; and whether the relief sought is proportionate) are relevant to this assessment.

In the immediate case, where the issue was whether there had been compliance with disclosure obligations, HH Judge Pelling considered the determining factors were the third and fourth in Pepparall J’s list (ie, whether there was evidence the defendant had incriminating documents and whether there was a real possibility he might destroy these).

As both those factors were present and the relief applied for was proportionate to its aims, HH Judge Pelling concluded it was appropriate to grant the imaging order sought.

Conclusions
The consensus seems to be developing that slightly less compelling evidence may be required to obtain an imaging order compared to what is needed to obtain a search order. However, practitioners seeking an imaging order should focus on the particular factors that justify the order in the circumstances of the case, rather than simply banking on the lower threshold to get them home.

KEY:
TBD TBD (Owen Holland) Ltd v Simons [2020] EWCA Civ 1182

Nix Nix v Emerdata Ltd [2024] EWHC 125 (Comm)

Garofalo Garofalo v Crisp [2023] EWHC 2625 (Ch)

Hyperama Hyperama Plc v Poulis [2018] EWHC 3483 (QB)