Disclosure working group proposes fundamental changes to litigation disclosure regime

There are a number of reasons why England and Wales continues to be considered a leading jurisdiction for the resolution of disputes. Yet for detractors and rival jurisdictions, one of the perceived downsides of litigating in England is cost, particularly when it comes to extensive, expensive disclosure exercises.

Recognising this, a judge-led working group  was set up to review the current process for disclosure of documents and to propose changes to streamline it.  The proposals have been published.  If adopted, as some senior judges have indicated they will be, the proposals will have a major effect on how litigants, their lawyers and the courts deal with disclosure of documents.

What’s wrong with the current disclosure regime?

Criticism of the costs associated with disclosure in England and Wales is nothing new. The Jackson reforms introduced in 2013 were intended to drive down costs by moving from a default “standard disclosure” model to a menu of options. In practice, though, standard disclosure remains by far the most common option for litigants and judges. As a result, disclosure costs have remained high, and although new technologies such as predictive coding have introduced new efficiencies into the search process, the sheer volume of data held by businesses means that the traditional level of searching and disclosure is often disproportionately expensive.

As a result, in 2016 a working group chaired by Lady Justice Gloster was set up with an ambitious remit to re-write and modernise the rules on disclosure, and encourage a change in culture and approach to disclosure by litigants and the courts.

After consulting with a wide variety of stakeholders, the working group has put forward a proposal for new rules and guidance, to be piloted in the Business and Property Courts.

Principles and duties

The new rules and guidance would set out clearly the key principles of disclosure, emphasising that the courts would expect parties to cooperate with each other and would be concerned to ensure that the scope of disclosure was not wider than was reasonable and proportionate to address the key issues in a case.

Parties would be subject to express duties to preserve relevant documents, undertake any search in a responsible manner and disclose adverse documents. Lawyers would also be under express duties, including a duty to cooperate with the lawyers of the other parties to ‘promote efficient conduct of disclosure’.

Basic Disclosure

Somewhat counter-intuitively, an additional “Basic Disclosure” requirement would be introduced at the outset of litigation, usually at the time of serving statements of case. Parties would be required at that stage to disclose the key documents on which they rely, and which are necessary for the other parties to understand the case they have to meet.

Parties would not be required to carry out any searches at this stage. The hope would be that in some cases, Basic Disclosure would be the only disclosure required.

Extended Disclosure

Where a party required further, ‘Extended Disclosure’, they would need to indicate this at the time of providing basic disclosure, and would then need to complete a Disclosure Review Document (DRD), which would include a list of the key issues for disclosure and any specific disclosure requests.

The parties would be required to exchange and discuss DRDs, with the intention of identifying any areas of agreement or disagreement in advance of the first Case Management Conference (CMC).

New menu of disclosure options

Where the court orders Extended Disclosure, the proposals set out five possible models:

• Model A: no, or no further disclosure (in relation to some or all of the issues).
• Model B: limited disclosure – parties would be required to disclose only the documents they intend to rely on, plus any that are necessary for other parties to understand the case they have to meet.
• Model C: request-led search-based disclosure – based on requests set out by the parties in the DRD for certain searches / categories of document.
• Model D: search-based disclosure – similar to the current ‘standard disclosure’ option, with each party required to carry out reasonable searches (subject to agreed parameters) and disclose documents likely to support or be adverse to its, or another party’s case.
• Model E: wider search-based disclosure – parties would be required to search for and disclose not just documents directly supportive or adverse to its or another party’s case, but also documents likely to lead to a train of inquiry that could lead to further searches. This would be ordered only in exceptional circumstances.

Known documents that are adverse to a party’s case

Some people consider that one of the advantages of resolving disputes in the courts of England and Wales is the obligation for parties to disclose documents that are adverse to their case.  This feature is retained in the proposals, but in an adapted form.

Whether there is no disclosure, Basic Disclosure, or Extended Disclosure, the parties will be required to disclose documents they already know about which are adverse to their case.  These are limited to documents already identified as a result of searches to obtain advice on the case or in preparing their statements of case.

The timing of adverse disclosure varies.  For Models B to E, this will be at the same time as ordered for Extended Disclosure.  In other cases, it will be within 30 days after the first CMC (unless the court orders a different time for this).

Robust case management by courts

At the heart of culture shift envisaged by the proposals would be powers and sanctions encouraging courts to more robustly manage disclosure. This would include the ability to limit searches (for example by custodian or date), require the use of data sampling or technology assisted review, order phased disclosure and impose specific orders or sanctions for non-compliance.

What’s next?

The working group has produced a draft practice direction which will be considered by the Civil Procedure Rules Committee in March / April 2018. The intention is for a pilot scheme to be implemented as soon as possible after that, which (with some exceptions) would run for two years in the Business and Property Courts in London, Bristol, Cardiff, Birmingham, Manchester, Leeds, Newcastle and Liverpool.

Osborne Clarke comment

While the working group’s proposals are not finalised procedure rules and may be amended before coming fully into force, there is no doubt that these proposals will form the basis of major reforms to the disclosure process in England and Wales. The proposals do raise a number of questions, including:

• how effective the disclosure of adverse documents will be on simplified disclosure models;
• whether the basic disclosure and DRD processes will lead to a front-loading of litigation costs, which could hamper settlement; and
• whether the sequencing of discussions and judicial consideration of disclosure and costs as proposed will be effective in practice.

Nevertheless, with all businesses holding ever-increasing volumes of data, new tools available for reviewing that data and challenges coming from other jurisdictions looking to compete with England and Wales, reforms to the disclosure process are certainly needed.

The Disclosure Working Group’s proposals are a reminder of the advantages for businesses in having a document management/retention policy that enables them to know where all their documents are. This will enable them to comply with their duties to preserve documents, find documents more easily and better control the process (and cost) of disclosure when disputes arise.

As the Rt Hon Sir Terence Etherton, Master of the Rolls said, commenting on these proposals:

“Disclosure is one of the key procedural stages in most evidence-based claims. It enables claims to progress to trial and facilitates settlement. The ability to obtain an order for a party to disclose documents that are adverse to its claim helps to make litigation in this jurisdiction attractive.

It is imperative that our disclosure system is, and is seen to be, highly efficient and flexible, reflecting developments in technology. Having effective and proportionate rules for disclosure is a key attraction of English law and English dispute resolution in international markets.”