Reformed discovery law is likely to come into effect on 1 February 2012.
What is discovery?
Discovery is the process by which parties to litigation are required to "discover" or disclose relevant documents to the other side. The discovery process can be a very costly and time consuming part of significant commercial litigation. This has been particularly so following the advent of electronic "documents" such as emails. The explanatory note to the proposed new rules suggests that at present, some 90% of all documents are generated electronically.
What are the most important changes?
- Initial disclosure
All documents referred to in the first document filed with the Court to initiate a claim (usually a statement of claim) and any other primary documents are to be served on the other party when the claim is served.
- Emphasis on co-operation
Parties will be required to co-operate with each other at an early stage to discuss the discovery methods they will use to conduct a reasonable search for relevant documents that is proportionate to the proceeding.
- Narrowing of standard discovery test
Currently, the standard test for discoverability is to include all documents that are or may be relevant to matters at issue in the proceeding (the Peruvian Guano test). The new "standard discovery" test will be an "adverse documents" test. This means that in addition to all documents on which a party relies, that party must also disclose all documents which adversely affect that party's own case or another party's case, or which support another party's case.
- Electronic discovery is the default position
All discovery will need to be given electronically unless the Court orders otherwise.
- Express obligation to preserve documents
A person who knows that a document "is or is reasonably likely" to be discoverable in a legal proceeding will need to take all reasonable steps to preserve that document. In particular, electronic documents which are potentially discoverable will need to be preserved in a "readily retrievable form" even if they would otherwise be deleted in the ordinary course of business.
What will these changes mean for me and my organisation?
The reforms are intended to ensure that the magnitude (and consequent cost) of discovery is to a greater degree proportionate to the litigation.
However, this will require careful thought to be given to the discovery process as soon as the possibility of litigation arises, particularly with the need to provide initial disclosure at an early stage. Consideration will also need to be given to the way in which electronic discovery is managed and in particular how documents are provided for discovery in order to achieve cost efficiencies (eg native Word, Excel, emails as electronic documents rather than hard copy).
Document retention policies should also be reviewed to ensure that the obligation to preserve documents is met (eg processes for email retention).