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Disclosure pilot rewrites the rules on disclosure in the UK

International Disputes Digest - 2019

Sep 2019

A two-year pilot of a new disclosure practice direction began in the Business and Property Courts of England and Wales on 1 January 2019. The pilot applies to both new and existing actions, including those where an order for disclosure had already been made under the previous rules before that date.

Aim and scope

The aim of the pilot is to reduce the costs, scale and complexity of disclosure. This is considered to be important in order to maintain the popularity of the English courts for cross-border litigation, in the light of increasing competition from international arbitration and from commercial courts in other countries. The pilot also aims to bring the disclosure process up to date in line with modern technologies by encouraging the use of analytical tools (including technology-assisted review)
and coding strategies. It will apply to all claims in the business and property courts except:

  • competition (anti-trust) claims.
  • public procurement claims.
  • claims falling within two existing pilots known as the Shorter and Flexible Trials Schemes.
  • claims in the Intellectual Property and Enterprise Court.
  • admiralty claims.
  • claims falling within the fixed costs or capped costs regimes.

Appendix 1: The changes

The key changes that are being trialled in the pilot include:

  • An express duty to send “litigation hold” letters to all relevant employees and former employees.
  • An obligation to take reasonable steps to stop agents or third parties destroying documents that might be relevant to an issue in the proceedings.
  • A new duty to refrain from producing irrelevant documents.
  • A new step of “Initial Disclosure”, in which parties must disclose the key documents on which they rely and which are necessary for the other party to understand the case against it at the same time as serving their statement of case, unless one of the following exceptions applies:
    • The parties agree to dispense with it.
    • The court orders that it is not required.
    • It would involve one of the parties disclosing more than the larger of 200 documents or 1,000 pages.
  • A requirement for parties to specify within 28 days of service of the last statement of case whether or not they will seek additional “Extended Disclosure”.
  • A new List of Issues for Disclosure to be prepared by claimants as a basis for determining the scope of any Extended Disclosure on an issue-by-issue basis, which is recorded in a Disclosure Review Document along with the parties’ proposals for using e-disclosure technology.
  • A revised disclosure menu with five models:
    • Model A: Disclosure confined to known documents that are adverse to the disclosing party, with no obligation to make a special search.
    • Model B: “Limited Disclosure”, consisting of known adverse documents, plus Initial Disclosure to the extent this has not already taken place.
    • Model C: “Request-led search-based disclosure”, consisting of known adverse documents plus documents specifically requested by another party.
    • Model D: “Narrow search-based disclosure”, broadly equivalent to the previous “standard disclosure” model in English litigation, in which a party must search for and disclose all documents that either support or are adverse to its own case or another party’s case.
    • Model E: “Wide search-based disclosure”, in which a party must search for and disclose all standard disclosure documents, plus “train of enquiry” documents that may lead to the identification of further documents for disclosure.
  • A new type of hearing – the Disclosure Guidance Hearing – in which parties can seek guidance from the court on disputed disclosure issues before or after a case management conference.

Adjustments in response to concerns raised in consultation

The pilot scheme, as implemented from 1 January 2019, has benefited considerably from a lengthy consultation period last year in which professional bodies and court users (including CMS) were able to make representations on the proposals. The exemptions from Initial Disclosure were narrowed, and definitions of “known” and “adverse” were added. Provision was also added for the outcome of Disclosure Guidance Hearings to be recorded by the parties in an agreed note or, if the
judge considers it appropriate, in a binding order. Finally, a procedure for monitoring the outcome of the pilot was added. This will be overseen by Professor Rachael Mulheron of Queen Mary University of London, a well-respected figure in the civil litigation field.

However, the most crucial factor in the success of the pilot will be whether or not it succeeds in producing a cultural change amongst litigants and the judiciary. With this in mind, there were arguably missed opportunities in not fully addressing the following issues raised during the consultation:

  • The provisions on sanctions for non-compliance with the new duties were not strengthened to encourage a greater use of costs sanctions.
  • The working group which produced the practice direction did not expressly specify that Model C should become the default model for disclosure in commercial cases, which would have brought civil litigation more closely into alignment with the
  • approach taken in international arbitration and in civil law countries. We understand, however, that Commercial Court judges have been informally advised that Model C should be the default, which would be a welcome approach.
  • It is not clear whether the judiciary have received sufficient training to understand the extent of the work required to conduct a standard disclosure exercise in the digital age and the ways in which advances in disclosure technology can assist this process. Without this, judges may not be sufficiently familiar with the practical implications of each disclosure model in a given case to ensure that disclosure orders are truly proportionate and cost-effective.

Experience so far

Our early experience of the pilot has been mixed. Inevitably, there have been transitional issues, and where the parties have been unable to agree the disclosure model, there has been a tendency – especially in the Technology and Construction court – for judges to default to Model D (equivalent to the old standard disclosure) out of familiarity.

On a positive note, in one case we were able to avoid the expense of a case management conference because the process of working through the Disclosure Review Document enabled the parties to agree all outstanding case management issues.

It remains to be seen whether the pilot will achieve its aim of reducing the costs, scale and complexity of disclosure. Time will tell but, for now, it is a step in the right direction.

Publication
International Disputes Digest - July 2019
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Authors

David Bridge
David Bridge
Partner
London
Liz Williams