Out-Law News | 18 Feb 2020 | 9:59 am | 3 min. read
In an unusual move Sir Geoffrey Vos handed down a judgment following a disclosure guidance hearing in order to clarify ways in which the disclosure pilot for the Business and Property Courts is supposed to work. Vos said there were “a number of ways” in which the parties to the case had misunderstood how the pilot was supposed to work, although he acknowledged that the solicitors had tried to comply with the exercise.
Litigation expert Richard Dickman of Pinsent Masons, the law firm behind Out-Law, said the judgment was an important step.
“Coming from the chancellor of the High Court, who has overall responsibility for the conduct of cases in the Business and Property Courts, parties and their lawyers should pay close attention to this guidance,” said Dickman, who was a member of the Disclosure Working Group which developed the pilot.
Dickman said the guidance would help clarify a number of issues experienced since the pilot began in January 2019.
“Businesses are understandably concerned about the pilot adding extra cost to the litigation process and can take some comfort from the judge’s clear statement that the disclosure pilot ‘should not become a disproportionately costly exercise’, although we do think it is difficult to avoid some front-loading of cost in cases to which the pilot applies,” Dickman said.
Businesses can take some comfort from the judge’s clear statement that the disclosure pilot ‘should not become a disproportionately costly exercise’.
Litigation expert Emilie Jones of Pinsent Masons said the case also showed how disclosure guidance hearings, a type of short informal hearing introduced by the pilot, can help parties resolve their differences on disclosure-related points.
“Use of disclosure guidance hearings has reportedly been very low, but this decision shows that they should not be overlooked as a mechanism for breaking an impasse which arises between the parties on disclosure issues,” Jones said.
In his judgment, Sir Geoffrey Vos emphasised the need for a “high level” of cooperation between the parties and their representatives. He said the use of the disclosure pilot by parties “as a stick with which to beat their opponents” was entirely unacceptable, and would likely be met by immediately payable adverse cost orders.
Jones said parties should note this “stark warning”.
“Businesses should not therefore view their legal representatives taking a cooperative approach towards the other side on disclosure issues as a sign of weakness,” Jones said.
Going into more detail on areas where the parties in this case had erred in their approach, the judge said the parties had misidentified the "issues for disclosure" which have to be set out as part of the pilot process. He said the starting point to identify issues for disclosure would be driven by the documentation likely to be in each party's possession.
The judge said the identification process should not be a “mechanical exercise” of identifying issues that would arise at trial for determination, but instead should focus on issues to which undisclosed documentation in the hands of one or more of the parties is likely to be relevant and important for the fair resolution of the claim.
“This decision contains a helpful reminder that in many cases there is no need for a long list of issues for disclosure. In particular, these should generally exclude both legal issues and any factual issues which can already be resolved from the documents exchanged by way of the initial disclosure which parties subject to the pilot generally have to give with their statements of case,” Dickman said.
The second area highlighted by the judge as being of concern was the parties’ approach to choosing between disclosure models. The pilot sets out five disclosure models, ranging from narrow to broad, and requires parties to indicate which model they are seeking.
The judge said the parties in the current case had over-complicated the process and incurred extra time and expense by not approaching the question of which model to choose more simply.
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This decision shows that disclosure hearings should not be overlooked as a mechanism for breaking an impasse.
“The agreement ultimately reached in this case, following guidance from the court, as to the appropriate models for disclosure represents a sensible balance and parties should look to adopt a similar approach where appropriate,” Dickman said.
“Disclosure on less contentious issues was restricted, while search-based disclosure similar to the old ‘standard disclosure’ was appropriate in relation to core issues of breach and loss. The judge cautioned against over-complicating the process by combining different models for these core issues, emphasising that the models chosen should ‘simplify the process rather than complicate it’,” Dickman said.
“These points emphasise that it is crucial for businesses to be able to get to grips quickly, in the event of a dispute, with what documents they are likely to hold and to what issues those documents may be relevant. This will drive what is included within any list of issues for disclosure and what models of disclosure are appropriate, as well as more generally enabling the business to form an effective litigation and disclosure strategy from the outset. It is therefore important to have mapped out, before any dispute arises, what data you have within the organisation and where,” Dickman said.
The disclosure pilot is currently due to run until the end of 2020. Jones said it was widely expected that it would become permanent in some form.
The Disclosure Working Group responsible for the pilot is inviting ongoing feedback on its operation and it will be interesting to see whether any of Sir Geoffrey Vos’s points of clarification are incorporated into a revised version of the pilot in due course,” Jones said.
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