At the beginning of 2019, a new disclosure pilot was introduced for those litigating in the Business and Property Courts. It does not currently apply to proceedings in the County Court but this is under review and a uniform process can be adopted for dealing with disclosure, regardless of the value of a dispute. 

The pilot applies to new and existing proceedings and compliance is compulsory unless you are litigating (1) a competition claim, (2) a public procurement claim, (3) within the Intellectual Property and Enterprise Court, (4) within the Admiralty Court, (5) within the Shorter and Flexible Trials Schemes or (6) within a fixed costs regime or a capped costs regime.

Referred to as a “new scheme for disclosure”, in its simplest form the focus of the pilot is the core issues that form the basis of the litigation. The parties are therefore encouraged to try and agree what those issues are and then agree the process to be used to identify the relevant disclosure that follows using prescribed “Models” that are explained in Practice Direction 51U.

At the time of writing, the pilot is nearly 10 months old and there do not appear to have been any major bumps in the road so far. For the external lawyers, the pilot seems to be working relatively well but what about the clients and their in-house legal team? What does it mean for them in practice? What front-loading can be done to keep external legal spend down?

A dispute does not arise when a client first instructs external lawyers. Months can often pass between a supplier or customer first falling out with a client during which the client will try and resolve the dispute themselves.

As soon as external lawyers are instructed and it is clear that litigation is on the horizon, one of the first things we will do is notify a client of their obligations regarding disclosure and obtain written confirmation from them that they have taken the steps that are outlined below. We are required to do this and when court proceedings are in play, the client will be required to confirm to the court (in writing) that they have taken the necessary steps to preserve documents.

A “document” includes any record of information. In practice, there is no type of record that can be ignored. As well as hard copy and electronic documents (including, for example, emails, text messages and voicemails), it includes information held on databases and electronic information that is not easily accessible (such as servers, back up storage and files that have been deleted). It also includes metadata and other embedded data.

A client’s duties in relation to disclosure include (1) taking reasonable steps to preserve relevant documents (so as not to destroy or delete them), (2) disclosing adverse documents (those which are unhelpful to the client’s case or helpful to their opponent), (3) searching for documents in a responsible and conscientious manner, (4) acting honestly when undertaking disclosure and (5) avoiding providing irrelevant documents.

The duty of preservation is particularly important. A client must ensure that no potentially relevant document is deleted or destroyed. In practice this means that a client must take various steps immediately including (1) suspending any document deletion or destruction policy that exists, (2) asking all current and former employees who may have a connection with the case not to delete or destroy any relevant documents, (3) taking reasonable steps so that agents or third parties who hold documents on a client’s behalf do not delete or destroy relevant documents, including providing them with notice in writing.

The written notification to current and former employees should identify the document or classes of documents to be preserved. It should also make it clear that those documents should not be deleted or destroyed, and that reasonable steps should be taken to preserve them.  

It is therefore advisable for those working in-house to implement a clear and written policy and protocol for the preservation of documents generally and as soon as it is clear that a dispute exists. Such a policy and protocol should identify a “point person” who will be responsible for the process moving forward and, ultimately, providing the written confirmation to court that necessary steps have been taken to preserve documents. With a written policy and protocol in place, this can be undertaken relatively simply at the appropriate time by producing a copy to the court and confirming that it has been followed.

A common issue that arises for external lawyers when first speaking to a client about disclosure is understanding how the client stores its documents (particularly electronic documents) and where that storage takes place. Again, having a written policy and protocol in place is beneficial here as a clear explanation of how and where documents are stored can be incorporated at the outset. In addition, the IT specialists can help to create and mould the policy by explaining what practically would need to be done to preserve documents once the policy is activated.

A close relationship with a finance department is also advisable as the first notification of a dispute can often be the non-payment of an invoice. The non-payment of an invoice could be the “trigger” for the policy and protocol to be implemented, even if this just takes place in the background. It does not need to directly escalate a dispute and can work quietly alongside ongoing attempts to resolve the dispute.