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A new era for disclosure

  • United Kingdom
  • Litigation and dispute management

17-08-2018

Disclosure pilot scheme given green light

New disclosure rules have been approved by the Civil Procedure Rules Committee (CPRC). Subject to ministerial consent, the new rules will be trialled during a two year pilot commencing on 1 January 2019 in the Business Property Courts in the Rolls Building and in Bristol, Birmingham, Cardiff, Leeds, Manchester, Liverpool and Newcastle.                                                                                            

Background

In response to concerns expressed by court users over the excessive costs, scale and complexity of disclosure, a Working Group was established in 2016 by the previous Chancellor of the High Court, Sir Terence Etherton (now Master of the Rolls) to identify problems and propose a practical solution. 

In November 2017, the Working Group identified a number of key defects in the current disclosure regime including the fact that the volume of data had vastly increased often to unmanageable proportions, the existing disclosure rules are conceptually based on paper disclosure and are not fit for purpose in dealing with electronic disclosure, searches are often wider than necessary, disclosure orders are not sufficiently focused on the issues with the introduction of a broad menu of disclosure options not being utilised and there is often inadequate engagement between the parties before the first Case Management Conference (CMC).

The Working Group unanimously concluded that a wholesale cultural change could only be achieved by the introduction of new rules.  Consequently a new draft Practice Direction 31 was drafted, consulted upon and revised before final approval was given by CPRC on 13 July 2018.

What are the new rules?

The overriding objective is to ensure that the burden and cost of disclosure is reasonable and proportionate in the context of the proceedings. A number of express duties are imposed on the parties and their legal advisers including:

  • a duty of engagement, co-operation and honesty
  • a duty to avoid providing documents not relevant to the issues
  • a continuing duty to provide ‘known adverse documents' irrespective of any disclosure order
  • a duty to preserve documents including sending a written notification to current and former employees, suspending document deletion processes and taking reasonable steps to ensure that agents or third parties preserve documents.

The rules introduce the concepts of Initial Disclosure,  Extended Disclosure  and Issues for Disclosure. They also introduce a new document, a Disclosure Review Document (DRD) which is to be used by the parties to identify, discuss and agree the Issues for Disclosure and the scope, method and cost of any Extended Disclosure sought.

Guidance may be sought from the court at Disclosure Guidance Hearings which are meant to be short and informal, but can leading to a binding order where appropriate.

New  concepts and terminology

Initial Disclosure – this requires parties to list the key documents relied upon or required by the other party/parties to understand the case. Unless the parties agree, there is dispensation from the court or it would involve a party providing more than 1000 pages or 200 documents in paper form, initial disclosure must be served with the statement of case together with copies (in electronic form) of any of the documents listed (unless privileged) not already in the other side’s possession. There is no obligation to carry out a search for documents beyond what has already been undertaken unless the court orders otherwise.

Extended Disclosure -  There are five models:

  • Model A – disclosure confined to the continuing duty to provide ‘known adverse documents’ These are documents that a party is aware of without undertaking any further searches. An organisation is ‘aware’ if any person with accountability or responsibility within that organisation (including former members of the organisation) is aware. This duty applies to all the Models.
  • Model B - to the extent not already provided by Initial Disclosure (and with no size restriction), key documents relied on or necessary to enable the other party/parties to understand its case.
  • Model C – request led disclosure of a document or class of  documents relating to  particular Issues For Disclosure
  • Model D – narrow search-based disclosure of all documents relating to the Issues For Disclosure which support or adversely affect its case with or without narrative documents. 
  • Model E –  in exceptional cases only, a wide search-based disclosure replicating Model D but including narrative documents plus documents which may lead to a ‘train of inquiry’ that could result in identification of further documents.

Issues for Disclosure and Disclosure Review Document

The parties must state in writing if Extended Disclosure is required. If one party requests it, the parties must engage to complete the DRD with the aim of agreeing the key issues in dispute (known as ‘Issues for Disclosure’) and the extent, method, scope and cost of the Extended Disclosure required for each of the issues. 

The finalised DRD and a Certificate of Compliance for each party should be filed before the CMC. There is no presumption that there will be Extended Disclosure and it will only be ordered at the CMC, if reasonable and proportionate with reference to a number of stated factors including, the nature and complexity of the proceedings, the importance of the case, the number of documents and financial positon of each party. 

Different models may be ordered for different issues or for different parties or at different stages. In the absence of agreement,  the court will make directions as to the scope, nature and method of any searches with a view to reducing the burden and cost of the disclosure exercise.

If an order for Extended Disclosure is made, a Disclosure Certificate with attached List of Documents must be served together with copies of the documents that are not privileged.

Costs and sanctions

The court may order that the question of who bears the cost of disclosure be given separate consideration at a later stage rather than being automatically borne by the unsuccessful party.

As to compliance with the pilot, the court has an express power to impose sanctions to include adjourning a hearing, making an adverse costs order or imposing conditions on further disclosure in addition to its usual case management powers.

Which proceedings fall within the pilot?

The pilot will apply to new and existing proceedings where either an order for disclosure has not already been made or where an existing order is varied or set aside.  It will not apply to proceedings within a fixed or capped costs regime or within the Shorter and Flexible Trials Scheme, nor to claims within the Admiralty, Intellectual Property and Enterprise or County Courts. It will not apply to competition or public procurement claims. 

No substantive changes have been made to the existing rules relating to pre-action disclosure orders and disclosure orders against non-parties.

Practical considerations

The express preservation duties and the need to provide initial disclosure means that disclosure must be considered at the outset of the case. The requirement to provide Initial Disclosure will also mean that it will necessary to incur additional costs at the start of a dispute. However, the fact that Initial Disclosure is restricted to key documents only and the fact that there is no duty to carry out further searches will mitigate these concerns to a certain extent. The costs of engaging with the other parties to agree the DRD (including attending any Disclosure Guidance Hearings) may also frontload the process, especially if faced with a difficult opponent.

The duty in relation to known adverse documents is restricted to the knowledge of persons with accountability or responsibility within an organisation. That definition could lead to uncertainty and satellite litigation.

In cases where cost budgeting applies, it will be possible to delay completion of the disclosure section of Precedent H until after the CMC.  That could lead to increased costs if a further CMC is required. It remains to be seen whether the courts will embrace the power to move away from the default position of ordering costs in the case.

Comment

Whilst the legal professional largely welcomes change to the disclosure process, some of the changes are radical and will dramatically change the way disclosure is conducted.  In order for the changes to be effective, they will need to be embraced by the legal profession and the judiciary. Training for lawyers, clients and the judiciary will be critical to make the new system work.

The January 2019 commencement date allows some lead time and the Working Group will run presentations before it commences.  Once the pilot starts, it will also be imperative that the court has adequate resources of time and expertise to actively case manage disclosure and impose sanctions where necessary. 

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