Disclosure reforms – the essential guide

A new disclosure regime is going to be piloted in the Business & Property Courts for two years from 1 January 2019. The changes to the present rules are intended to control the burden and costs of disclosure, with a view to the new regime replacing the present disclosure regime in CPR 31 in due course. 

Some of the changes do no more than codify existing duties imposed on lawyers and parties which are not presently set out in CPR 31. Others introduce a new approach to searching for documents - searches will require court approval and will be related to issues or groups of issues. This volte-face replaces the present duty to search required by standard disclosure, the default order under CPR 31.5, with a requirement to obtain permission to carry out searches. This in turn brings with it a new approach to disclosure of adverse documents, those documents that help the other side, whether by adversely affecting your own case or supporting another party’s case. A new procedural timetable accompanies these changes, together with several mandatory milestones certifying compliance with various duties. 

A new set of rules for something as important as disclosure is a daunting prospect. Anyone concerned with civil litigation should sit down and read Practice Direction 51U in due course but for now, these are the points you need to take on board.

Why do I need to think about this before January 2019?

The new rules are going to apply to existing B&PC cases in the High Court, even those that are still in the pre-action stage. There are no transitional provisions. This means, in theory at least, that if you have a case management conference aftr 1 January 2019 the new regime applies. You should certainly expect the judge to follow the spirit of the new rules. Given the fact that PD 51U was published in September, legally-represented parties will be expected to have understood their duties and to have complied with them – most already exist even if they are not set out in CPR 31.

Can I ignore the pilot if I don’t have a case in the B&PCs?

You could but that would be a mistake. Major reforms like this one influence the zeitgeist. This is inevitable in this case, given that the long-term plan is to introduce the new regime more widely. Judges in the Queen’s Bench Division will know about the pilot and will have realised that many aspects of PD 51U apply readily to all civil litigation. These aspects include the summary of the duties of the parties and their lawyers regarding preservation of data, the litigation hold and privilege, and the concept of ordering search-based disclosure by issue instead of across the board.

What’s really changing?

The fundamental change is the move away from “standard disclosure”. The term “standard disclosure” has been abandoned in order to change behaviour and replaced by two tiers of disclosure: Initial Disclosure and court-ordered Extended Disclosure, which comes in five models from A to E. It will now be difficult to obtain an order for “standard disclosure” (broadly the same as Model D Extended Disclosure), and in some cases it may be difficult to obtain an order for any search-based disclosure. We will see more requests for specific search-based disclosure relating to an issue or group of issues (known as Model C Extended Disclosure). 

The idea is that it will be possible to limit disclosure in some cases to Initial Disclosure. This is similar to disclosure of key documents under the pre-action protocols, and although there is a size limit, the parties can agree to increase it. Where one party indicates that they think Initial Disclosure won’t be sufficient, this triggers a procedural timetable involving drawing up and agreeing a list of issues, costing proposals for a particular Extended Disclosure model for each issue or group of issues, and completing a new joint document called the disclosure review document or DRD. The DRD takes the place of the disclosure report and the electronic disclosure questionnaire under CPR 31(5). 

The move away from “standard disclosure” brings with it a change concerning the disclosure of known adverse documents. There is still a duty to disclose known adverse documents but since there is no obligation to make a general search for documents under several of the models, there is clearly a danger that parties will turn a blind eye to any adverse documents that do show up or limit any searches to avoid coming across an adverse document. 

PD 51U introduces a duty to use reasonable efforts to avoid producing irrelevant documents. At its extreme, a document dump can be used as an aggressive tactic. Although not referred to in CPR 31, this problem was highlighted by Rix LJ more than ten years ago in Nichia Corporation v Argos Limited: 

“…it is the downstream costs caused by over-disclosure which so often are so substantial and so pointless. It can even be said, in cases of massive over-disclosure, that there is a real risk that the really important documents will get overlooked – where does a wise man hide a leaf?”.

What should I be doing now?

These are the things you should be thinking about now in relation to any disputes, and particularly those where proceedings have just started in the B&PCs, or might be issued in those courts in the future. 

• Preservation duties: Look at the list of duties placed on parties and their lawyers in PD 51U and check whether you already comply with them. They apply from the point litigation is contemplated. 
• Litigation hold: This is the obligation to send a written notice to employees and former employees telling them to preserve classes of potentially relevant data. PD 51U requires written notice to be given also to agents or third parties who may hold documents on the party’s behalf. 
• Document trail: Lawyers need to give written advice to their clients about their duties and the new regime also requires the parties to provide confirmation that these duties have been complied with. For example, a party must comply with their preservation duties, including giving the litigation hold, and confirm this initially in writing to their lawyer and then to the court and other parties when serving their first statement of case. Initial Disclosure excludes documents already disclosed so you will need to keep a record of documents disclosed pre-action as well as details of any searches undertaken at any stage. 
• Think about issues from day one: It will be much easier to deal with the procedural timetable and completion of the DRD (mandatory if either party wants any Extended Disclosure) if you start out thinking about disclosure by issue. Work out which issues in the case are relevant to disclosure and whether search-based disclosure is needed to determine each issue. 
• Refresh your knowledge of technology: Where any party requests search-based Extended Disclosure under models C, D or E, they are going to have to cost both their proposal and any made by the other parties. In a complex or high value case, it may be proportionate to instruct a disclosure consultant to help with this and possibly to attend the CMC. In other cases this may not be appropriate, in which case the party or their lawyer will need to be able to deal with this themselves and explain the options and the cost of each to the judge.

Is the new regime really going to reduce costs?

The new regime has come about because of dissatisfaction with the costs related to excessive disclosure. This in turn has resulted from the failure of judges to use their existing wide case management powers and the menu of options in CPR 31.5(7) to limit and control disclosure. These options include dispensing with “standard disclosure”, or disclosure in its entirety, as well as ordering disclosure on an issue by issue basis. 

The new regime has been created in large part by practitioners and judges in the Commercial Court to answer concerns of the GC100 group of general counsel of FTSE 100 companies. The complexity of the new regime, in particular the requirement to propose and agree disclosure models on an issue by issue basis, may work well for litigation involving these companies. It is more questionable whether it will work as well for smaller companies and individuals, including litigants in person. This will depend in part on whether the judges comply with their duty in PD 51U to consider the financial position of each party when making orders for Extended Disclosure. 

In lower value claims, the regime may prove to be an expensive sledgehammer to crack a nut. Parties will have to spend time and money long before the CMC engaging with the list of issues and costing different search options. Ask any solicitor about costs budgeting, also introduced to reduce costs, and they will tell you that preparing and agreeing the costs budget unhelpfully front-loads costs. CMCs will take longer if the judge is to engage properly with both disclosure and budgeting, or a second CMC may be needed. Tightly limiting Extended Disclosure could lead to expensive repeat applications for further searches to be carried out. 

There is only one way in which the new regime will achieve its goal of reducing costs. The parties have genuinely to co-operate from the start and/or the judges have to compel them to do so. PD 51U introduces new deadlines which will lead inevitably to applications for relief from sanctions and opportunities for tactical skirmishing. Judges have failed to get a grip on disclosure up until now. If they do not use the wide sanctions available under PD 51U to penalise parties who fail to co-operate, costs could well increase.