Out-Law News | 28 Oct 2022 | 10:58 am | 4 min. read
A High Court judge in England has ordered parties to abandon the standard process for disclosure due to the special circumstances of the dispute.
It comes after a number of significant issues were raised over the proposed disclosure process in the competition case between Genius Sports Technologies Ltd, Soft Construct (Malta) Ltd and others. Handing down his ruling in the case, Mr Justice Marcus Smith said there was a “real risk” that the disclosure regime which he had previously ordered should apply would “miss relevant documents”.
The disclosure regime which the judge had previously ordered appears to have been that set out in Practice Direction (PD) 51U – now PD 57AD – of the Civil Procedure Rules. Competition claims are, by default, excluded from the PD 57AD regime, but it is possible for judges in competition cases to order that the PD 57AD process should be followed.
The judge suggested a bespoke regime involving the “over-provision of documentation” from the producing party to the receiving party. Under his proposal, the producing party would not attempt to “identify and produce relevant documents” for the receiving party as usual, but would instead only exclude “unequivocally irrelevant and privileged documents” from its disclosure, allowing the receiving party to review the rest itself.
Genius Sports and others opposed the alternative disclosure process, citing the 2007 decision in the case of Nichia v Argos, which found that “massive over-disclosure” risked important documents being “overlooked”. They also questioned the court’s jurisdiction to make an order relating to the disclosure process. However, Justice Smith said that modern disclosure processes “are entirely different” to those carried out in 2007, since the majority of documents are now electronic, and solicitors use sophisticated disclosure platforms to carry out searches “of enormous complexity and sophistication”.
But Justice Smith said that the “standard” approach to disclosure was inappropriate for the case before the court, since the receiving party could not be confident that an electronic filter would not discard relevant material. “[They] would – rightly – want to be assured that material documentation has not been excluded by a computerised process selected by the producing party…The electronic filtering of documents gives rise to the real risk that really important documents are not looked at by any human agent – whether on the part of the producing party or the receiving party,” he added.
Justice Smith said it was “evident” that the PD 51U disclosure approach, first introduced in 2019, had “not worked satisfactorily” in another case which was closely related to this one. He asserted his ability to reconsider his initial decision to apply such an approach, instead imposing a bespoke regime. “Absent any special case, standard disclosure…is the order of the day. But the court can ‘direct otherwise’, and that is what I am doing,” he said.
According to the ruling, the proposed ‘over-provision’ disclosure model should only be adopted in cases where use of the standard process could result in relevant documents being missed, and where there “is no danger of the process being used to oppress any of the parties”. Justice Smith said the risk of disclosing privileged material “cannot be eliminated” but must be “contained to the levels of any ‘standard’ process of disclosure.” He added that each producing party should provide a statement “setting out exactly what has been done to exclude disclosure of privileged material.”
Confidential material - whether relevant or irrelevant – must also be appropriately protected, according to the ruling. Such material must be produced to the receiving party, subject to the obligation – contained in CPR 31.22 – to use the material only for the purpose of the proceedings in which it is disclosed. Justice Smith insisted that the disclosure process “should not become an inadvertent form of illicit information exchange between competitors”. He added that each receiving party will be obliged to keep a record of who accesses disclosed material as part of a detailed procedure that would act “as a safeguard”. Additional steps include giving written undertakings, which are required before individuals other than external lawyers or experts can access the disclosure.
He ordered each party to identify precisely which documents will be subject to an electronic search, before each producing party swears an affidavit that lists custodians, repositories and collections of documents that will be searched, as well as any date ranges that will be applied to the search for documents. “The parties will have 14 days to probe and discuss this evidence, so as to satisfy themselves that it is suitably inclusive,” Justice Smith said. He added that each producing party should “err on the side of over-inclusion” and any issues which cannot be resolved in discussion should be referred to the court instead.
Alan Davis of Pinsent Masons said: “As the judge observed, competition claims can raise to greater challenges in relation to disclosure given the potentially more nuanced approach that is required in order to identify relevant documents that may evidence a competition law breach. In other words, it may not always be obvious that a particular document is relevant to the competition law assessment on its face. In order to ensure that relevant documents are not missed, he therefore ordered a more inclusive approach to the disclosure of documents.”
Caroline Hearn of Pinsent Masons said: “It will be interesting, however, to see how a party can over-disclose in a cost- and time-efficient manner. It is also necessary to consider how the receiving party will deal with a vast volume of data – and whether there will be any consideration of the costs of them potentially reviewing substantially more documents than is normally considered proportionate in disclosure.”
“E-data advanced intelligence and disclosure platform functionality plays an important part in ensuring disclosure is kept proportionate to the case, whilst ensuring de minimis amount of relevant material is lost. Indeed – it may be more likely relevant material is lost in a more traditional ‘linear’ review due to the subjective nature of having different reviewers review the same data set. The judge’s comments on the protection of privileged and confidential data are also very interesting and potentially relevant to non-competition cases, too,” Hearn added.