The Supreme Court Gives Guidance on Obligation to Produce Documents

The Finnish Supreme Court has issued a long-awaited and rare precedent on the obligation to produce documents to the court (KKO:2019:7). Parties requesting the court to order the other party to produce documents is very common in business-related litigation and arbitration proceedings, but there is little legal practice on the subject. The Supreme Court upheld in its precedent that business secrets do not prevent the court from ordering a party to produce documents if such order is justified due to important reasons.

Background

The Finnish judicial system does not recognise the concept of a discovery procedure. As such, a court order to produce documents to the court to be used as evidence is, in practice, the only procedural tool available to Finnish attorneys to gain access to evidentiary material that is in the possession of another party in civil proceedings. As a result, these requests are rather common in business-related litigation and arbitration proceedings. In order to obtain as many documents as possible that might have relevance in the matter, these requests usually concern extensive documentary material. At the same time, the documents often contain business secrets and other confidential information that a party does not wish to disclose to the other party that is often a competitor.

Key aspects discussed in the precedent

In this precedent, the Supreme Court discussed the general prerequisites for imposing the obligation to produce documents as well as the protection of business secrets in relation to such request. Under Finnish procedural law, a party to the proceedings is entitled to refuse to testify or produce documents containing business secrets, unless testifying is required for very important reasons. Therefore, the disclosure obligation is not imposed on documents that contain business secrets, unless there are important reasons that require the disclosure. The existence of such reasons will be assessed on a case-by-case basis.

In this particular case, the Supreme Court considered whether such important reasons existed and, as a result of this consideration, breached the protection of business secrets. The court justified this breach by stating that the requested documents were material evidence in the case and that there was no alternative evidence available. As the threshold of proof for whether certain evidence is material to the case at hand is rather low, this prerequisite is likely to be met in many cases because it is quite difficult to dispute the evidentiary value of a document without providing the document or disclosing its contents.

In addition, there was no evidence of damage suffered as result of the disclosure of the information contained in the documents. Quite often, actual damage arising out of document disclosure is difficult to prove – particularly without disclosing the actual contents of the documents. In considering this, the Supreme Court took into account the relevance of the information contained in the requested documents as some time had passed from the time when the requested documents were drawn up. This is true in many cases as potential evidentiary material often concerns past events. As such, it is easy to argue that information relating to such events has lost its relevance when disputing the other party’s invocation of business secrets..

The Supreme Court also referred to the possibility of a confidentiality order. However, this is not often sufficient for parties to ensure the protection of their business secrets as the main concern is not the material’s disclosure to the public, but to the opposing party.

Key outcome of the precedent

This precedent confirms that the protection of business secrets can be breached in relation to a request to produce documents to a Finnish court of law, and it provides guidance on what aspects parties should consider when it comes to invoking the protection of business secrets in connection with such request.

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