A completely revised rule for disclosure in the English Courts has been published for consultation, with a pilot scheme in Rolls Building Courts scheduled for 2018.
As we previously predicted would happen in 2017, the Master of the Rolls, Sir Terence Etherton, has announced the publication of a new draft rule for disclosure in civil proceedings in England and Wales. This follows the formation, in May 2016, of a Disclosure Working Group in response to widespread concerns expressed by court users and the profession regarding the perceived excessive costs, scale and complexity of disclosure.
A drafting committee established by the Working Group to consider the form of a new rule comprised of Mr Justice Knowles CBE, Chief Master Marsh and Ed Crosse (Simmons & Simmons partner and President of the London Solicitors Litigation Association), supported by Simmons professional support lawyers David Bridge and Kirsty Oliver.
What are the problems?
The Working Group, chaired by Lady Justice Gloster, identified the following key defects in the current disclosure regime:
- Since the Civil Procedure Rules (CPR) came into force 18 years ago the volume of data that may fall to be disclosed has vastly increased, often to unmanageable proportions. The hope that the standard disclosure test introduced in the CPR would reduce the volume of disclosure, and its cost, has not been fulfilled.
- Neither the profession, nor the judiciary, has adequately utilised the “menu” of alternative orders introduced in CPR 31.5(7) in 2013. In practice, standard disclosure has remained the default order for almost all cases.
- Searches are often far wider than is necessary, and disclosure orders are not sufficiently focused on the key issues. This often results in the production of vast quantities of data, only a small proportion of which is in fact referred to at trial.
- There is inadequate engagement between the parties and their advisers prior to the first Case Management Conference (CMC) in relation to disclosure.
- The existing rule is based on paper disclosure, with electronic documents dealt with in a separate Practice Direction, whereas in reality hard copy documents are now the exception. Concepts such as “inspection” of documents are outdated.
The Working Group’s conclusion was that a wholesale cultural change is required. The result is a completely new rule, which will be tested in a pilot scheme for the majority of cases proceeding in the Business and Property Courts across the UK.
What are the proposed solutions?
In summary, the key changes proposed for the pilot are:
- The duties of the parties, and of their lawyers, in relation to disclosure are expressly set out. These include a duty to cooperate with each other and assist the court over disclosure. There are express sanctions for non-compliance. There is also a duty to disclose known adverse documents, irrespective of what order for disclosure is made. This preserves the concept of “cards on the table” litigation, leaving only the scope of any search for documents to be agreed or ordered.
- Save where the parties agree to dispense with this (and subject to several other exceptions), “Basic Disclosure” of key documents necessary for other parties to understand the case they have to meet will be given with statements of case. A search should not be required for Basic Disclosure, although one may be undertaken.
- After close of statements of case, and before the CMC, the parties should be required to discuss and jointly complete a joint Disclosure Review Document (DRD) which replaces the existing Electronic Disclosure Questionnaire and Disclosure Report.
- The DRD is intended to provide a mandatory framework for parties and their advisers to co-operate and engage prior to the first CMC with a view to agreeing a proportionate and efficient approach to disclosure. It will require the parties to list the main issues in the case where disclosure is likely to be needed and exchange proposals for “Extended Disclosure”, selecting a Model of disclosure for each issue from a menu of options (Models A to E). The parties will also need to share information as to how documents are stored and how they might, if required, be searched and reviewed.
- At the Case Management Conference, the court should consider by reference to the DRD, which Model of Extended Disclosure is to apply to which issue (or to all issues). The models range from an order for no disclosure in relation to a particular issue, through to the widest form of disclosure, requiring the production of documents which may lead to a train of enquiry. Model C is for disclosure by requests for documents or narrow categories of documents between the parties, much in the style of the procedure common in international arbitration, but bolstered by the overarching duty to disclose any adverse documents.
- The form of disclosure where each party must carry out a reasonable search for documents supporting or adversely affecting any party’s case remains an option as Model D, but the phrase “standard disclosure” will not be used, emphasising that there is no default order for disclosure.
- Form H Cost Budgets in relation to disclosure should be completed after an order for disclosure has been made rather than before, by which time the parties should have a much better sense of what the actual costs are likely to be. Parties will, however, be required to give estimates of the likely costs of disclosure when filing the completed DRD in order that the question of proportionality may be considered at the CMC before an order for disclosure is made.
- Other more detailed provisions of CPR 31 will remain unchanged (eg pre-action disclosure, subsequent use of disclosed documents, orders for disclosure against persons not a party, and others).
What happens next?
The Working Group consulted with a range of interested parties and received extensive feedback, much of which is now reflected in the proposed scheme. Further consultation on the draft will now take place, with interested parties encouraged to make suggestions for changes through professional associations.
This consultation process will close on 28 February 2018, after which the draft rule will be considered by the Civil Procedure Rule Committee. As soon as reasonably practicable thereafter, and with some limited exceptions, the proposal is that the scheme will then be piloted across the Business and Property Courts in the Rolls Building and in the centres of Bristol, Cardiff, Birmingham, Manchester and Leeds for a two year period.
It is perhaps inevitable that there will be resistance in some quarters to further change to the procedural rules. But there can be little doubt that disclosure is one area where escalating costs are making the English courts unattractive as a forum for dispute resolution for all but the highest value cases. It is to be hoped that the proposed new rule avoids throwing the baby out with the bathwater: in the right case, disclosure remains an attractive feature of English court litigation. The retention of Model D search-based disclosure as an option ensures that it can still be ordered where appropriate, but only where appropriate. The measure of success for the new rule will be whether it triggers a move away from assuming that this should be the norm in all litigation.
As Rosemary Martin, Group General Counsel & Company Secretary, Vodafone Group, UK and Chair of the GC100, an organisation which did much to prompt the review of the rules on disclosure, said on the launch of the draft rule:
“The GC100 members are delighted that the Working Group has taken the task of revising the disclosure rules so seriously and with a much more radical attitude than many were expecting. If, collectively, we can get behaviours to change too (the difficult bit) then this initiative will be enormously valuable for the future.”
The draft Practice Direction, Disclosure Review Document and Guidance Note can be found here.