Crane Bank v DFCU: high court clarifies disclosure thresholds under PD 57AD

The High Court has handed down a significant judgement in Crane Bank Limited & Ors v DFCU Bank Limited & Ors [2026] EWHC 522 (Comm), clarifying the legal thresholds under CPR Practice Direction 57AD that govern applications to remedy alleged failures in extended disclosure — and the circumstances in which original orders may be varied.

The case arises from a major commercial dispute relating to the acquisition of Crane Bank Limited (CBL) by DFCU Bank. The claimants brought a disclosure application alleging deficiencies in DFCU's compliance with existing extended disclosure orders, seeking among other things the production of customer files, witness statements on search methodology, and disclosure relating to third-party custodians.

The paragraph 17 threshold

Dame Clare Moulder DBE rejected DFCU's contention that an applicant must establish, on the balance of probabilities, that there has been a definitive failure to comply with a disclosure order before paragraph 17 of the Practice Direction is engaged. The plain language of paragraph 17.1 — which applies "where there has been or may have been" a failure — is deliberately broader. Drawing on Matthews and Malek, Disclosure (6th edn), the Court confirmed that the jurisdiction can arise even where non-compliance has not been conclusively established, provided there is more than a "general suspicion".

DFCU also sought to rely on Agents' Mutual Ltd v Gascoigne Halman Ltd [2019] EWHC 3104 (Ch) for the proposition that an applicant must demonstrate that documents of a particular type must obviously exist before the absence of production can found an inference of disclosure failure. The Court declined to read that case as establishing so broad a rule. The significance of a low document yield, the judgement confirms, is inherently fact-dependent.

The paragraph 18 threshold

Where an applicant seeks to vary an existing extended disclosure order under paragraph 18, the higher threshold of necessity applies: the variation must be shown to be necessary for the just disposal of the proceedings, as well as reasonable and proportionate. The Court applied this more demanding standard consistently when assessing requests that went beyond correcting alleged compliance failures.

Customer files and cherry-picking

DFCU agreed to produce forty customer files representing approximately 72% of the gross value of non-performing loans and 92% of written-off loans. It additionally offered twenty further files selected on the basis of high loan provisions. The Court rejected this selection methodology, accepting the claimants' argument that files identified as having high provisions would, on their face, appear to be of lower loan value — raising a concern that the selection was not representative and could amount to cherry-picking in DFCU's favour. The parties were directed to agree an objective selection basis, with a backstop disclosure deadline of 3 April 2026.

Limits on witness statement orders

Several requests for explanatory witness statements were refused. Where information had already been provided in a signed Disclosure Certificate — a document carrying a statement of truth — the Court found no basis to require duplication by way of witness statement. Similarly, requests for details of intended future searches were declined; the Practice Direction does not, on the Court's analysis, extend to ordering advance disclosure of search methodology.

Third-party custodians and retention policies

The Court declined to require a witness statement setting out DFCU's understanding of KPMG Kenya's and KPMG Uganda's document retention policies, finding that no failure in compliance had been established and that DFCU's own understanding of third-party policies would in any event be of uncertain accuracy.

One issue was reserved following handdown: whether documents relating to loan restructurings undertaken by DFCU after acquiring CBL's book fall within the existing disclosure obligations. The Court noted the point had not been fully argued orally and directed supplemental written submissions unless the parties reach agreement.

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