Discovery of documents in employer / employee situations
Discovery is an important stage in civil litigation, whereby the parties disclose, inspect and obtain copies of each other’s documents. Subject to some exceptions, there is an obligation on the parties to disclose documents that are relevant to the case, even if the documents in question help to advance the case of the opponent. However, what happens when discovery is sought from an employee or former employee of a company?
Discovery of Documents from an Existing Employee
An existing employee is viewed as a servant of the company and can be compelled to make discovery on behalf of the company, even if the employee is not a party to the action. Hence, where such relevant information is in the possession of the company’s servants or agents, the court could require the company to disclose documents from the employee.
Discovery of Documents from a Former Employee
Unlike a current employee, a former employee is no longer under the control of the employer and, therefore, discovery of documents against a former employee is generally outside the scope of general discovery, but it would be possible to pursue non-party discovery.
However, if the former employee acted as an agent of the employer, then the documents created and relating to the acts done in the name of the employer in his or her capacity as an agent are disclosable. This notion is further strengthened if the document in question was created and generated during the employment period.
The case of Fairstar Heavy Transport NV v Adkins & Anor  2 CLC 272 stated that a principal has a continuing entitlement to obtain documents from a former employee, who was an agent of the company, relating to acts done under the principal’s name during the course of his/her employment. The former employee is under a duty, as the company’s former agent, to allow it to inspect documents relating to the affairs of the principal notwithstanding the termination of the agency relationship.
However, it is not always the case that a former employee is an agent of the employer. “Some employees have agency powers, and these may be very wide; in other cases, they may be very limited. Others have no agency powers.” Hence, in the absence of a principal-agent relationship, the applicant must adhere to the stricter discovery rules under Order 24, Rule 7A of the RHC for the disclosure of documents by a person who is not a party to the proceedings.
Requirements for Discovery Applications Against a Non-Party
Under section 42 of the High Court Ordinance (Cap. 4) (“HCO”) and Order 24 rule 7A of the Rules of the High Court (Cap. 4A) (“RHC”), an applicant must meet the following requirements for a discovery application against a non-party:
- The non-party is likely to have the documents sought in his possession, custody or power;
- The documents sought are directly relevant to an issue or issues arising in or which is likely to arise in the proceedings; and
- The order is necessary either for fairly disposing of the matter or for saving costs.
The test for non-party discovery pursuant to Order 24 rule 7A RHC is stricter than the general rules on discovery, as the party applying for discovery must show that the documents are “directly relevant” and further, must show that it is necessary for the documents to be disclosed for disposing fairly of the matter or for saving costs.
In relation to discovery of documents from a former employee, the employer may seek to prove that the former employee was an agent of the employer. If the employer is unsuccessful in determining that a principal-agent relationship existed between them, then the employer may make an application under Order 24, rule 7A RHC for non-party discovery.
This is article is not and does not purport to be legal advice. For any enquiries related to this article, please contact Mr. Ben Chan.