Shaping landmark litigation disclosure reforms in England and Wales

Out-Law Analysis | 26 Jul 2019 | 3:41 pm | 5 min. read

We are now six months into a two-year pilot of a new litigation disclosure regime in the Business and Property Courts in England and Wales, and those responsible for it are seeking feedback on its operation.

The pilot, which began on 1 January 2019, was introduced in response to dissatisfaction expressed by in-house counsel, the legal profession and other court users about the disproportionate burden and cost of the disclosure process, which has been exacerbated by the proliferation of electronic data in recent times.

The aims of the pilot are welcome, and many of its provisions well thought out and workable. In addition, much of the pilot reflects existing best practice: for example, it has long been an essential feature of an effective litigation strategy to get on top of disclosure issues and deploy the tools that technology offers from an early stage of a dispute.

Dickman Richard

Richard Dickman

Legal Director

If the pilot is to achieve its aims, it is essential that parties and the judiciary embrace it in a meaningful, constructive way.

However, if the pilot is to achieve its aims - rather than having the opposite effect of increasing costs by the introduction of additional procedural steps – it is essential that parties and the judiciary embrace it in a meaningful, constructive way. It is also critical that the scope for dispute about the pilot's application is minimised by clear drafting and guidance.

What does the pilot involve?

Intended to introduce "wholesale cultural change", the pilot is aimed at making disclosure more proportionate and focused on the issues in dispute between the parties. It requires parties to get to grips with their data and the issues in dispute at an early stage, and to cooperate meaningfully with each other in making proposals as to the scope of disclosure in relation to these issues.

Parties must generally give 'initial disclosure' of key documents when serving their statements of case, but there is no presumption that any further disclosure will be ordered. Instead, the court will decide which of a number of 'models' of 'extended disclosure' is reasonable and proportionate in the circumstances of the case.

The extended disclosure models range from no further disclosure to a wide 'train of enquiry' disclosure. In making its assessment, the court will have regard to an agreed 'list of issues for disclosure' setting out the main issues in dispute, and to other information provided in the disclosure review document (DRD) which the parties must closely collaborate on and complete, as far as possible, in advance of the first case management conference (CMC). At the CMC, the court may make a 'pick and mix' disclosure order involving different models of disclosure for different issues.

There is also a strong focus on the use of technology, with parties being expected to use technology assisted review (TAR) in most substantial cases.

How have parties responded to the pilot?

Six months in, Pinsent Masons has written to the working group responsible for operating the pilot to provide feedback on the experiences of our disputes practice as well as highlight some specific areas of concern for our clients. Our hope is that this will help those responsible for the pilot in refining the rules and providing further guidance.

We have suggested a number of drafting changes to ensure that the rules are as clear and comprehensive as possible so as to give parties certainty and avoid costly correspondence between parties debating disclosure issues, as well as more detailed suggestions on the following themes and issues.

Transitional cases

There have been some uncertainties as to the application of the pilot to cases which began before the commencement date of 1 January 2019. While these issues are subsiding as time goes on, there are still some areas where further guidance would be helpful.

Document preservation

Clients have been concerned about the potential breadth of the document preservation obligations under the pilot, which are prescriptive and include for example a requirement to send a document preservation notice to "all relevant employees and former employees". This is a particular concern for large 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 in sensitive disputes, where there may be a concern about writing to large numbers of individuals giving details about the dispute, particularly where many of those individuals may no longer be affiliated with the business.

We have therefore suggested clarification of the rules to make clear that the document preservation obligations on parties at the outset of a dispute are not intended to be unduly onerous. For example, we consider that identifying the "relevant employees and former employees" to whom a document preservation notice should be sent must involve some assessment of the degree of their involvement in the relevant events, and that parties should be required to act reasonably in relation to document preservation rather than owing absolute duties.

Initial disclosure

This has not proved unduly onerous to date, particularly since in commercial disputes there is generally significant sharing of documents pre-action. However, we have suggested some clarifications in order to ensure that this additional step in the process does not add unnecessary cost.

The list of issues for disclosure

Again, preparation of this list has not proved unduly onerous, but we have suggested some clarification and/or guidance including ensuring that parties focus on the key issues so as not to unnecessarily increase costs.

The disclosure review document

Completion of the DRD is an involved process which required significant time and expenditure. It is essential that court listing timescales allow parties enough time to complete the DRD and that the form itself is as well drafted and structured as possible so that the task is not more onerous than needed. We have made some recommendations in these areas.

Costs budgets and estimates

Since parties will not know the scope of the disclosure exercise until the court has made its disclosure order at the CMC, they are permitted to agree to postpone completion of the disclosure section of any costs budget filed by them under the costs management regime until after the disclosure order has been made. However, there remain a number of challenges in relation to accurately estimating costs before the scope of disclosure is determined at the CMC. This has led to concern about parties being held to estimates which prove too low, with the result that even if they win they incur substantial irrecoverable costs. We have made a number of suggestions aimed at minimising these risks.

The models of extended disclosure

Our experience to date is that parties are proposing different models of disclosure, including 'pick and mix' disclosure orders; although in large commercial disputes the debate tends to be about whether the appropriate approach is Model D (similar to current 'standard disclosure') or Model C (arbitration-style 'requests to produce'). We consider that some further guidance would be helpful as to when each of these approaches is suitable.

We believe it is critical to the success of the pilot that judges be encouraged, and given sufficient time, to take an active role in relation to disclosure.

More generally, we believe it is critical to the success of the pilot that judges be encouraged, and given sufficient time, to take an active role in relation to disclosure.

Directions at the case management conference

We consider that further guidance on the directions courts might give at CMCs would be helpful. In many cases there are still outstanding disclosure issues after the CMC, and the directions given need to provide for the parties to reach agreement on those issues.

Disclosure guidance hearings

Disclosure guidance hearings are short, informal hearings for which parties may apply, either before or after a CMC, in order to resolve impasses on disclosure issues. Our perception is that these have been little used to date, and we consider that this may be because the time limit of 30 minutes of judicial preparation followed by a 30-minute hearing is too restrictive. We have suggested that one hour or preparation and one hour for the hearing be allowed.

If, as widely expected, the pilot becomes permanent at the end of its two-year initial term, and is rolled out to other courts, these recommendations should help to ensure that the new regime works as well as possible in the long term for commercial parties involved in litigation.

Richard Dickman is a litigation expert at Pinsent Masons, the law firm behind Out-Law. Dickman was a member of the Disclosure Working Group which developed the pilot.