UK: Disclosure Pilot In The Business And Property Courts

Following a lengthy period of review and consultation, the long-awaited Disclosure Pilot Scheme will come into effect from 1 January 2019.

This will require substantial changes to how parties and their representatives approach disclosure in both new and existing claims across the Business and Property Courts.

Origins of the Pilot

In May 2016, the Chancellor of the High Court, Sir Terence Etherton, now the Master of the Rolls, established a Working Group in response to widespread concerns regarding the excessive scale and costs of disclosure.

The Working Group reported that, while the Jackson reforms in 2013 had introduced a menu of options for disclosure as set out at CPR 31.5(7), both lawyers and judges had failed to utilise those options with Standard Disclosure remaining the default. As a result "large amounts of wholly irrelevant documents [had often been produced] leading to a considerable waste of time and costs". The existing Rule 31 was also "conceptually based on paper" and had failed to keep step with the huge volumes of electronic documents now regularly encountered in High Court litigation. Ultimately, the Working Group concluded that Rule 31 was not fit for purpose and undertook to draft an entirely new Practice Direction with a focus on proportionality and technology.

Key changes

While Rule 31 came in for scathing criticism and was, notionally, rewritten in its entirety, the options or Models for disclosure under the new Practice Direction (ranging from disclosure only of adverse documents through to train of enquiry) are remarkably similar to those on offer under CPR 31.5(7).

The key changes are, in reality, more in approach than form with court users being left in little doubt that judges will expect them to engage with the full range of options on offer for disclosure and to do away with Standard Disclosure as the default.

To encourage parties to engage with disclosure at an early stage, they will be required to agree a List of Issues for Disclosure well ahead of the first Case Management Conference (CMC) and to propose appropriate Models in respect of each issue. Where there is disagreement on the appropriate Model for any issue, the parties will be required to provide detailed costs estimates ahead of the CMC and it appears these will be a significant factor in persuading the judge as to the appropriate order.

Where a party is not ordered to search for documents relevant to an issue, it will still be required to disclose Adverse Documents it is aware of without searching. To reduce the risk of identifying such documents, when instructing solicitors at the outset of a dispute, parties may consider limiting their searches in the hope of never being ordered to look more thoroughly. However, this would be a high-risk strategy, which could, for example, result in a party pleading a position inconsistent with a document it is later ordered to search for and disclose or which is already in its opponent's possession.

The requirements around document preservation at the outset of a dispute have also been tightened with parties obliged to send hold notices to both current and former employees. Lawyers come under their own obligation to inform clients of these duties and to obtain written confirmation that appropriate steps have been taken.  

When serving the Particulars of Claim or Defence, parties will also be required to give Initial Disclosure of the Key Documents relied on or necessary to enable the other party to understand the claim or defence it has to meet.

Impact on existing cases

The new Practice Direction will apply not only to cases commenced on or after 1 January 2019 but also to all cases (within the scope of the Pilot) where a disclosure order has not been made by that date.

While, technically, there is no obligation to take any steps to comply with the Practice Direction prior to 1 January 2019, judges are unlikely to be sympathetic to parties who have made no effort to meet its requirements and there is a risk of adjournments, delays and sanctions in costs.

Parties and practitioners should therefore consider now what the impact of the Pilot will be across their cases and what steps can be taken to assist the Court to make an order in line with the Practice Direction. This will likely include, as a minimum, seeking to agree a list of issues for disclosure. 

Comment

All attempts to reduce the spiralling burden of disclosure in a digital world are to be welcomed.

However, there is a risk that the level of detail required under the new regime may result in CMCs being taken up entirely with the minutiae of disclosure, resulting in multiple hearings, delays to cases and additional costs being incurred – precisely the opposite of what is intended.

The success of the scheme will depend on court users embracing the underlying goal of proportionality and the judiciary being prepared to proactively manage cases where necessary. 

The Practice Direction can be found here.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.