A recent High Court decision has demonstrated how investors who suspect fraud may, in appropriate circumstances, obtain documents before issuing their substantive claim.
In El Debs & Ors v Coughlan [2026] EWHC 2160 (Ch), members of the Debs family sought pre-action disclosure from businessman Craig Coughlan following the loss of a multimillion-pound investment. They are considering claims for fraudulent misrepresentation and unlawful means conspiracy.
The substantive allegations of fraud have not been determined. The High Court was deciding whether documents should be disclosed before those proceedings were brought, rather than whether Mr Coughlan had committed fraud.
For potential claimants in England and Wales, the decision provides a useful illustration of pre-action disclosure, a procedure which can require a likely future defendant to disclose specified documents before court proceedings formally begin.
What did the High Court decide in El Debs v Coughlan?
The applicants were members of the Debs family, who had invested several million pounds in Drecford Holdings Limited, a company incorporated in the Abu Dhabi Global Market.
The investment had been promoted as involving commodities trading. The investors allege that representations made when the investment was promoted were false and that relevant conflicts involving people connected with their investment adviser were not disclosed.
Payments were initially made, but Drecford subsequently reported liquidity difficulties. Payments then stopped and communications with the investors ceased. The company was later deregistered.
The investors are considering claims against Craig Coughlan for fraudulent misrepresentation and unlawful means conspiracy. Those claims remain proposed claims and the underlying allegations have not been determined at trial.
Before starting those proceedings, the investors applied for disclosure of documents relating to the alleged representations, dealings between relevant parties and the circumstances surrounding their investment.
The High Court granted pre-action disclosure, subject to limitations on some of the categories of documents requested.
The court considered that the applicants already had a sufficient factual basis for the proposed claims. Disclosure could help them plead the claims properly, identify the correct defendants, reduce the need for later amendments and potentially reveal evidence inconsistent with the allegations.
Importantly, the court rejected the suggestion that the application amounted to an improper fishing exercise.
When can you obtain disclosure before court proceedings begin?
Rule 31.16 of the Civil Procedure Rules allows the court to order disclosure before proceedings have started where specified conditions are satisfied.
Both the person seeking disclosure and the respondent must be likely to become parties to the anticipated proceedings. The documents sought must also fall within the respondent’s prospective disclosure obligations if proceedings were already underway.
The court must then consider whether early disclosure is desirable to dispose fairly of the anticipated proceedings, help resolve the dispute without proceedings or save costs.
This means that pre-action disclosure is not a general right to investigate another person or company.
A claimant cannot ordinarily use CPR 31.16 simply because they suspect that something improper might have happened and want to search through documents until they find a potential claim.
There must already be a sufficiently identifiable dispute and anticipated proceedings.
El Debs is helpful because the court considered that the applicants had moved beyond mere speculation. They had an existing evidential basis for the proposed fraud and conspiracy claims and sought documents capable of helping them understand and plead those allegations properly.
Why can pre-action disclosure matter in a suspected fraud claim?
Fraud claims often involve an information imbalance.
The person who has lost money may know that an investment has failed, funds have moved or explanations do not appear to add up, but the documents showing precisely what happened may remain under the control of other people.
That does not reduce the need for a claimant alleging fraud to have a proper basis for doing so.
Allegations of fraud and dishonesty are serious and must be properly pleaded. Pre-action disclosure can sometimes help bridge the gap between having sufficient evidence to contemplate a claim and having the documents needed to identify its precise factual basis.
The El Debs decision illustrates that distinction.
The applicants were not permitted to search generally for evidence of wrongdoing. They sought defined categories of documents relating to proposed causes of action which had already been identified.
Another useful aspect of the judgment concerned control of documents.
Mr Coughlan argued that documents belonging to Drecford were not necessarily within his control. The High Court considered his role in the management and control of the company when examining that argument.
The decision should not be interpreted as meaning that every director automatically controls every company document. Control for disclosure purposes is fact-sensitive. A person’s actual ability to obtain or access documents may become important when the court considers whether particular material falls within their disclosure obligations.
Our commercial litigation solicitors regularly advise on disclosure issues and evidential strategy where businesses or individuals are considering or defending substantial commercial proceedings. The correct application will depend on what information is already available and what the proposed claim actually requires.
What other court orders can help obtain information or protect assets in fraud cases?
Pre-action disclosure is only one of several remedies which may potentially be relevant where fraud is suspected.
The correct remedy depends on what the claimant needs to achieve.
Where information or documents are held by an innocent third party who has become mixed up in the wrongdoing, a Norwich Pharmacal order may sometimes be appropriate. Such orders can, for example, assist a claimant who needs information to identify the proper defendant or understand how wrongdoing occurred.
This is different from CPR 31.16, which is concerned with disclosure by somebody who is likely to become a party to the contemplated proceedings. Our guide to Norwich Pharmacal orders explains the distinction in more detail.
A claimant concerned that relevant evidence may be destroyed or concealed may, in exceptional circumstances, consider whether a search order is appropriate.
Where the concern is instead that assets may be moved, dissipated or placed beyond the reach of a future judgment, a freezing order may need to be considered. Freezing orders do not determine the underlying claim. Their purpose is to preserve assets while the substantive dispute is resolved.
These remedies are not interchangeable.
Each involves its own legal requirements, evidence and proportionality considerations. Some are exceptional orders with significant consequences for the respondent. A potential claimant should therefore identify the actual problem before deciding which application, if any, is appropriate.
What should an investor do if they suspect money has been misappropriated?
The starting point is usually to preserve and analyse the evidence already available.
Investment agreements, bank transfers, emails, messages, presentations, financial statements and communications with advisers may begin to establish what representations were made, where funds were supposed to go and what subsequently happened.
Potential claimants should also identify the gaps in that evidence.
For example, the missing information might concern the identity of the recipient of a payment, communications between two potential defendants, the destination of funds or documents showing whether a representation was true when it was made.
That helps determine whether the next step is ordinary pre-action correspondence, a disclosure application, a Norwich Pharmacal order or some form of urgent protective relief.
Potential recovery also needs to be considered alongside liability.
Establishing a strong fraud claim may achieve little commercially if assets have disappeared before a judgment can be enforced. Where there is credible evidence of a real risk of dissipation, considering asset preservation at an early stage can therefore be as important as obtaining information.
Our freezing order and fraud team advises claimants and defendants on freezing injunctions, Norwich Pharmacal orders, search orders and related asset recovery proceedings in England and Wales.
The El Debs decision is a useful reminder that a claimant does not always have to issue substantive fraud proceedings before seeking relevant documents. Where a proper prospective claim already exists and the requirements of CPR 31.16 are satisfied, pre-action disclosure can help establish the evidence needed to decide how the claim should proceed.
