In this article, we summarise the key provisions of the mandatory disclosure pilot for cases in the Business and Property Courts, introduced on 1 January 2019.
Details of the pilot are set out in the new Practice Direction 51U (PD), which introduces a number of new documents.
Duties of the parties and the legal representatives
The PD sets out a list of specific duties for both parties and their legal representatives. There is a wider duty to preserve documents, a duty to disclose “known adverse documents”, and a duty to co-operate with the opposing party.
Whilst the pilot commenced on 1 January 2019, its provisions may apply to matters that commenced prior to that date. The courts’ approach to transitional matters will emerge soon. However, the intention is for parties to endeavour to resolve such matters between themselves in the spirit of the new regime.
Disclosure of known adverse documents
Parties are to disclose documents of which they are aware and which are adverse, ie documents that contradict or materially damage the disclosing party’s version of events on an issue in dispute, or support the version of events of an opposing party on an issue in dispute. Where the party is an individual, it is clear whose knowledge is relevant. However, where a party is a company or other organisation, the “knowledge” is that of:
- any person within the company who is accountable or who has responsibility for the events or circumstances which are subject of the proceedings; or
- any person who is responsible or accountable for the conduct of the proceedings. The knowledge element is specifically extended to include both current and former employees. In terms of identifying known adverse documents in the case of a former employee, the party is required to take reasonable steps to check the position regarding the existence of known adverse documents with that former employee.
The PD requires the disclosure of known adverse documents “once proceedings have commenced”. Later provisions in the PD state that a Disclosure Certificate must be provided confirming that all known adverse documents have been disclosed either within 60 days of the first case management conference (if there is no Extended Disclosure – see below) or along with Extended Disclosure.
Preservation of documents
Both parties to the litigation and their legal advisors are under a duty to ensure that for the duration of the proceedings relevant documents are not destroyed and any automatic destruction processes are suspended. Parties are required to give notice to relevant employees (both current and former), agents and other third parties that hold potentially disclosable documents of the need to preserve that material for the duration of the proceedings. Notices will identify the documents or classes of documents to be preserved.
Parties to the proceedings must take reasonable steps to ensure that these employees, agents and third parties do not delete or destroy documents. Legal advisors will need to obtain a written confirmation from their client (or an appropriate representative of the client) that steps have been taken to preserve relevant documents. In addition, parties must confirm when statements of case are served that steps have been taken to preserve documents in accordance with these duties.
Parties are to provide Initial Disclosure comprising whichever is the larger of 1,000 pages of material or 200 documents (or some other higher but reasonable figure that the parties agree). It will include disclosure of the:
- key documents on which a party has relied in support of their claim or defence advanced in their statement of case; and
- key documents that are necessary to enable the other parties to understand the claim or defence they have to meet.
Documents are to be provided electronically. Initial Disclosure could be dispensed with in certain circumstances including where it would involve providing more than 1,000 pages or 200 documents. There is a requirement to serve a list of documents with a Disclosure Certificate, in the same way that there is service of an N286 Form List of Documents when giving disclosure under CPR Part 31. However, under the pilot it is a requirement to provide the documents at the same time the parties serve the Initial Disclosure Disclosure Certificate, as opposed to needing to specifically request inspection of disclosed documents.
Entitlement to Extended Disclosure is subject to the court being persuaded that it is appropriate to do so in order to resolve any of the issues for disclosure. The judiciary has been very clear that the equivalent of ‘standard disclosure’ (see Model D below) will no longer be the ‘standard’ direction.
The new Disclosure Review Document (DRD) is a document recording both parties’ approach to the disclosure exercise. The issues for disclosure that need to be determined by some reference to contemporaneous material are set out in a tabular form in the DRD.
Once the issues have been identified and either agreed or ordered, the appropriate review methodology to apply to each issue needs to be determined and agreed or ordered. The review methodology to be applied is based on one of five models, which have the following features:
- Model A: No order for disclosure (which amounts to disclosure of known adverse documents only);
- Model B: Limited disclosure, requiring disclosure of only key documents, based on a search no broader than that undertaken as part of gathering documents for Initial Disclosure, together with any adverse documents;
- Model C: Request-led search-based disclosure, amounting to disclosure of particular or narrow classes of documents;
- Model D: Narrow search-based disclosure, which is akin to standard disclosure under CPR 31.6 and which will only be ordered it if it is reasonable and proportionate; or
- Model E: Wide search-based disclosure, which is akin to disclosure under Peruvian Guano, ie documents that would leading to a line of enquiry, or requiring additional searches to be conducted that may lead to identifying further documents for disclosure.
As with Initial Disclosure,there is a requirement to serve a Disclosure Certificate in addition to the documents themselves when giving Extended Disclosure.
Disclosure Guidance Hearings
In an effort to reduce the amount of time taken up during a case management conference (CMC) dealing with disclosure issues, the pilot introduces a 30-minute Disclosure Guidance Hearing. This hearing is to deal with extended disclosure matters and will be held either before or after the CMC. The aim is that hearings are deliberately kept short. Whether this will be realistic in major disputes remains to be seen. Parties seeking a Disclosure Guidance Hearing need to certify that a genuine effort was made to resolve any disclosure disputes prior to approaching the court, in accordance with their duty to co-operate.
Included amongst the duties imposed upon legal practitioners is the requirement to cooperate in connection with the use of technology for the purposes of disclosure. When discussing the appropriate disclosure model to be used in Extended Disclosure, legal practitioners must consider whether the use of software or analytical tools should be adopted, including technology assisted review software and techniques. Using technology to reduce the burden of disclosure is a recurrent theme throughout the pilot. For example, Section 2 of the DRD refers to the use of analytics and technology assisted review and asks practitioners to explain why it should or should not be employed in the disclosure exercise.
Coming to grips with the need to understand and utilise technology may well be the most challenging aspect of the new regime for practitioners. However, with information and data generation exponentially increasing the architects of the pilot rightly saw the need for reliance on technology to make disclosure more cost-efficient and effective. Technology can be used to identify more important documents sooner or even getting a better overall understanding of the documents.
One thing that the new regime may have unintentionally created is the need for law firms to have specialist disclosure lawyers and increased need for training for lawyers to enable them to get maximum benefits to clients from disclosure technology.
Given that the scope of the disclosure exercise will not be known until the court makes appropriate orders, the budgets for the disclosure exercise may be completed after the CMC. This is designed to ensure that parties are able to budget more accurately for disclosure and avoid the need to apply for variations to the budget as a result of disclosure issues that only become apparent after a disclosure order has been made. Conversely, the court will now be a lot less reluctant to allow variations to disclosure budgets.