Disclosure Pilot refinements to reduce burden and costs for parties

Out-Law Analysis | 13 Nov 2020 | 5:20 pm | 7 min. read

Modest proposed changes to the Disclosure Pilot in England and Wales address a number of concerns held by businesses about the operation of the new rules, and should reduce some of the burden and costs of compliance.

The Civil Procedure Rules Committee has approved a series of proposed amendments to the rules, which have applied to disclosure of documents in most commercial disputes in the courts of England and Wales since 1 January 2019. These amendments will be included in the next available Practice Direction update amending the Civil Procedure Rules (CPRs), so the date on which they will formally come into effect is still to be confirmed.

The changes were proposed by the Disclosure Working Group (DWG) responsible for the Pilot in light of feedback gathered from businesses and the legal profession. The Pilot has also recently been extended by another year, to the end of 2021, so there will be time for the changes to be tested before any decisions are made about the future of the Pilot. This being a 'living' pilot, further changes may also be made.

The Pilot, which applies to most cases in the Business and Property Courts, was introduced in response to dissatisfaction about the disproportionate burden and cost of the disclosure process, which has been exacerbated by the proliferation of electronic data. The Pilot is aimed at making disclosure more tailored and proportionate, focusing on the issues in dispute between the parties and the documents necessary to resolve them. It requires significant cooperation between parties, particularly in the completion of the disclosure review document (DRD) used by the court to make decisions about the scope of disclosure; and a strong focus on the use of technology to make disclosure more efficient.

Document preservation

Among the changes to be made to the Pilot is a softening of the wording in the Pilot Practice Direction regarding the extent of a party's obligation to send document preservation notices in the early stages of a dispute.

The breadth of the document preservation duties under the Pilot has caused some parties concern. These duties currently include, for example, a requirement to send a document preservation notice to "all relevant employees and former employees". This has been a particular concern for larger organisations where the number of employees and former employees who may have had some involvement in events relevant to a dispute may be very substantial and where, in sensitive disputes, there may be concern about wide dissemination of information about the matter. A majority of those providing feedback on the Pilot identified difficulties with its preservation requirements.

Dickman Richard

Richard Dickman

Legal Director

The Pilot is aimed at making disclosure more tailored and proportionate, focusing on the issues in dispute between the parties and the documents necessary to resolve them.

The Practice Direction will now be amended to make clear that a document preservation notice only needs to be sent to "relevant employees and former employees" - the word "all" will be removed - where there are "reasonable grounds for believing that the employee or former employee may be in possession of disclosable documents which are not also in the party's possession".

This is a sensible revision to the wording which will give businesses comfort that the document preservation process under the Pilot is intended to be robust but proportionate. It does emphasise, however, the importance of good information governance. Document preservation exercises will be less onerous for businesses whose data retention and storage policies and procedures are such that they can be confident that employees or former employees will not retain relevant documents; or that all such documents will be in the possession of the business. This involves robust policies and systems around the capturing and storage of data on centralised systems and the retrieval of data from leavers before departure.

Initial disclosure

Changes will be made to the exceptions to and requirements of 'initial disclosure', to ensure this phase of the process is kept proportionate.

Under the Pilot, parties must generally give initial disclosure of key documents when serving their statements of case. Any further disclosure comes later and is termed 'extended disclosure'. The requirement to give initial disclosure is subject to certain exceptions, including that it falls away if complying would involve disclosing more than "(about) whichever is the larger of 1,000 pages or 200 documents".

This threshold is intended to stop initial disclosure from being burdensome. However, in practice, it is rarely triggered. In part, this may be because, in calculating the numbers of documents involved for this purpose, parties must exclude documents which have already been provided to the other side. In many commercial disputes this may be most of the key documents, as significant pre-action engagement is likely to have taken place between the parties. One piece of feedback on the Pilot pointed out that this has the unintended consequence that a party which has complied with its pre-action obligations by providing key documents to the other parties is more likely to have to give initial disclosure than a party which has failed to comply with its pre-action obligations.

The position will now be reversed so that parties calculating whether they have met the volume threshold for initial disclosure should include in their calculations any documents already provided to the other side. To give a simple example, this means that if 1,000 pages or 200 documents of key documents have already been provided by one party to the other pre-action, it is unlikely to be necessary for that party to also have to give initial disclosure.

In cases where initial disclosure is given, there is an exemption from having to disclose repeat copies of those documents which have already been given to the other side. However, currently, such documents must still be listed in the disclosing party's Initial Disclosure List of Documents. This seems unnecessary and will now be dispensed with. It will be clarified that parties can agree not to list out their initial disclosure documents.

In most cases, initial disclosure is not particularly onerous and can be helpful in encouraging a "cards on the table" approach. However, these revisions are sensible in that they seek to iron out some of the ways in which initial disclosure can, in certain cases, lead to duplication of effort or unnecessary or disproportionate cost.

'Known adverse documents'

The changes also helpfully clarify that 'known adverse documents' do not need to be provided as part of initial disclosure and only need to be provided at a later point – in most cases when extended disclosure is given.

Known adverse documents are, broadly, documents within a party's control of which it is actually aware and which it knows are damaging to its case. The obligation to disclose known adverse documents is intended to avoid parties hiding a "smoking gun", regardless of the scope or model of disclosure ordered.

There has been some debate since the introduction of the Pilot as to how early in the process known adverse documents should be disclosed. Although the amendments here only clarify the existing position, they may help to avoid wasteful satellite discussions between parties on this issue.

The disclosure review document

Changes will be made to the DRD form and the rules and guidance on its completion, to try to make this aspect of the process less complex and more proportionate.

The DRD is a lengthy document in which parties must set out and agree as far as possible:

  • the 'list of issues for disclosure' - the key issues which the court will need to decide by reference to contemporaneous documents;
  • for each of these issues, what should be the scope of any further disclosure by reference to as number of 'models' of extended disclosure ranging from disclosure of known adverse documents only to the widest form of search-based disclosure;
  • a data map of their documents; and
  • proposals for collecting, searching and reviewing that data.

Significant work is involved in completing the DRD and, despite encouragement from the court to keep the process proportionate and adapt the template as needed, some businesses have expressed concern about the time and cost involved in this task. Indeed, 88% of those providing feedback on the Pilot indicated that the DRD process had increased costs and time spent, with many saying that it had added tens of thousands of pounds in extra costs.

The DRD and associated rules and guidance will now be amended with some modest, but nonetheless sensible, changes to:

  • make clear that parties who do not seek any order for disclosure which involves the carrying out of a search for documents do not need to complete the DRD, including the list of issues for disclosure;
  • confirm that parties may shorten or modify the DRD for more or less complex cases, and should act in a reasonable and proportionate way in agreeing a suitable approach;
  • clarify that parties should liaise about the DRD in person, by phone or by email, rather than through correspondence, which is likely to be inefficient. This echoes guidance given in recent case law; and
  • simplify the DRD questions to an extent, albeit significant information and discussion about the parties' data and how it is to be collected and processed is still required.

'Model C' requests for documents

More clarification will be provided within the guidance on the DRD about when the use of 'Model C' requests for documents will be suitable.

Model C is the disclosure model under the Pilot which has been the most controversial. It involves one party making narrow requests for specific documents or categories of documents from the other side. Going into the Pilot, some anticipated that Model C would become the 'default' order for disclosure. However, since then, judges have emphasised - and the guidance will now make clearer - that Model C requests should only be used where they can be kept narrow and limited in number. Multiple Model C requests in relation to the same data set will rarely be appropriate. This is because such an approach can make the search and review exercise more, rather than less, complicated and costly and, for example, can inhibit the use of technology-assisted review tools.

This clarification is welcome as it should further discourage parties from unnecessarily overcomplicating the approach to disclosure and thereby driving up costs; encouraging them instead to focus on what it the most effective and proportionate way to interrogate a particular data set.

Richard Dickman was a member of the Disclosure Working Group which developed the Pilot.