New rules on disclosure came into force on 1 April 2013 which will significantly transform the way in which commercial litigation is conducted. The aim of the new rules is to encourage parties to consider their disclosure options from the outset of litigation and to budget appropriately in accordance with the new cost management regime. Disclosure is often one of the most costly and timely stages in litigation and it is hoped that these reforms, which build on the changes which came into force in October 2010 on electronic disclosure, will reduce both the volume and cost of the disclosure process.
The old position
Prior to 1 April 2013, the default position was 'standard disclosure' which requires each party to disclose documents on which it relies and documents which either adversely affect its own case or adversely affect or support another party's case. When giving 'standard disclosure', each party was under an obligation to undertake a 'reasonable search' of such documents. The court rarely departed from the default position when giving directions, meaning that costs could often spiral as parties sought to comply with the standard disclosure requirement.
The new rules
The following rules on disclosure apply to all multi-track cases except personal injury claims (in which 'standard disclosure' will continue to be the default position unless the court orders otherwise):
- At least 14 days before the first case management conference (CMC), each party must file and serve a disclosure report verified by a statement of truth which:
- describes briefly what documents exist or might exist that are or may be relevant to the issues in dispute;
- describes where and with whom these documents are or may be located, and in the case of electronic documents, how they are stored;
- estimates the 'broad range of costs' that could be involved were the court to order 'standard disclosure'; and
- states which of the 'menu' options and directions for disclosure is to be sought (see below).
- At least seven days before the first CMC, the parties must, by telephone or in a meeting, discuss and seek to agree proposals which meet the overriding objective of enabling the court to deal with cases justly and 'at a proportionate cost'. Should the parties agree a proposal which the court considers 'appropriate in all the circumstances', it will approve the approach without the need for a hearing and give directions.
- At the first CMC, if the parties have not agreed proposals, the court will make one of the following disclosure orders (referred to as the 'disclosure menu'):
- to dispense with disclosure;
- to order a party to disclose the documents on which it relies and to request any specific disclosure it requires from the other party;
- to direct, where practicable, that disclosure be given by each party on an 'issue by issue' basis;
- to order that each party discloses documents which it is reasonable to suppose may contain information to enable it to advance its own case, damage any other party's case, or which leads to an enquiry which has either of those consequences;
- to order 'standard disclosure'; or
- to make any other order which it thinks appropriate.
The court can also give a broad range of other related directions, namely on (i) the scope of the searches to be undertaken (where, for what, by whom and in respect of what time periods), (ii) whether or not lists of documents are needed, (iii) how and when to give disclosure, (iv) the format of the disclosed documents, (v) what to do about documents that no longer exist, and (vi) staged disclosure.
The new rules, whilst appearing more complex, should reduce the time and cost of the disclosure process by encouraging parties to give sufficient consideration to disclosure earlier on in the proceedings. The new 'disclosure menu' gives judges the ability to review the extent to which disclosure is actually necessary (if necessary at all).
Given the broad range of disclosure orders that can be made by the court, parties will need to consider which disclosure order they are seeking. A party may, for example, wish to take advantage of the breadth of the last option, which Lord Justice Jackson has suggested could include a "key to the warehouse" order where it is intended that a party hands over all their documents to the other side after removing privileged documents.
The requirement for parties to meet and discuss proposals at least seven days before the first CMC will hopefully encourage parties to agree a mutually acceptable disclosure order without the need for a CMC to actually go ahead, but it remains to be seen to what extent this will work in practice.
While the new rules are clearly a significant departure from the old regime, the application of the new menu will vary on a case-by-case basis as the extent to which disclosure should be made will depend on the type and value of the dispute as well as how 'document-heavy' a claim is. Parties are encouraged to complete and exchange the electronic disclosure questionnaires which will assist them in identifying the most appropriate disclosure order for their particular case.