What Is It?
A two-year pilot scheme running in certain divisions of the English High Court, designed to reduce the volume of disclosure documents (discovery) produced in English litigation.
What Will It Mean?
In some cases – most likely smaller ones – the new scheme will result in the disclosure of more documents at an earlier stage in the proceedings. Previously, it was common practice for a limited amount of documentation (such as the relevant contract in a contractual dispute) to be included with the Statements of Case (pleadings), despite not being mandatory. Now, the scheme requires parties to provide documents on which they intend to rely or which are necessary to help other parties understand the case, when they provide their Statements of Case. Parties must then try to agree (failing which the court will decide) the scope of the disclosure that is to be given, by reference to certain models, ranging from very limited disclosure to a much more extensive exercise.
Since 1 January 2019, a two-year pilot scheme relating to disclosure has applied to new and existing proceedings in certain divisions of the High Court of England & Wales including, notably, the Commercial Court, which handles complex national and international business disputes, including aviation-related disputes.
The scheme seeks to address widespread concern over the ever-increasing volume and cost of disclosure that is often a feature of litigation in England & Wales. It builds on changes introduced in 2013, which were designed to streamline the disclosure process in the light of the massive increase in electronic disclosure.
Although the 2013 reforms introduced a “menu” of disclosure options (ranging from no disclosure at all, to disclosure by issue, up to the very wide disclosure that might be appropriate in a complex case), parties nonetheless continued to default to “Standard Disclosure” (which requires each party to disclose to the other non-privileged documents that both support or harm its case, or support or harm its opponent’s case). This meant that the disclosure process continued to produce large amounts of completely irrelevant documents at significant cost.
It is fair to say that the 2013 reforms failed to streamline the disclosure process as intended, although given the increase in electronic documents, that is not surprising. The new scheme aims to remedy this and achieve a cultural shift in the way disclosure is handled in the following ways:
1) Initial Disclosure
Echoing the position under certain arbitration rules which provide for some disclosure to be given at an early stage of the proceedings, the parties are to supply the key documents (i) on which they have relied (expressly or otherwise) and (ii) that are necessary to enable the other parties to understand the claim or defence they have to meet, at the same time as they file their Statements of Case.
However, the impact of this stage of the process may ultimately be limited, as parties can choose to opt out of it by mutual agreement and move straight on to Extended Disclosure instead (see 3) below). This stage is automatically omitted where a party states in writing (and in good faith) that more than 1,000 pages or 200 documents must be produced to fulfil the requirements of the stage. In the case of complex disputes, therefore, it is expected that this stage will be omitted.
2) Disclosure Review Document
Even if the Initial Disclosure stage is omitted, the parties are required to meet, discuss and complete a joint Disclosure Review Document (DRD). The DRD is a replacement for the current mandatory Disclosure Report and optional Electronic Document Questionnaire and encourages the parties to try to agree on which issues in the case require disclosure and to share information about the storage and accessibility of documents. The parties should also seek to agree on what form disclosure should take (by reference to the disclosure models available in the Extended Disclosure stage (see 3) below)), estimate the likely costs of disclosure and consider the role of technology in the disclosure process.
The DRD must be filed at court no later than five days prior to the case management conference (CMC), which is the first major procedural hearing in the proceedings and takes place after the main statements of case have been filed.
3) Extended Disclosure
Extended Disclosure is generally the second stage of the process in addition, or as an alternative, to Initial Disclosure. It provides for the disclosure by each party of further documents on the basis of a range of models from A (the disclosure of known adverse documents only) to E (a search for any document that supports or adversely affects the case or to any documents that lead to the discovery of supporting or adverse documents). The models are broadly based on the “menu” under the old regime, although parties must now justify their choice of model to prevent the former trend of defaulting to “Standard Disclosure”. There is also a separate duty, which applies in any event, to disclose any known adverse documents (being documents, other than privileged documents, of which a party is actually aware and which contradict or materially damage the disclosing party’s case or support the case of the other party). For companies or organisations, it may be necessary to consult with former, as well as current, employees, in order to establish the documents of which the company is aware.
An order for Extended Disclosure will generally be made by the court at the first CMC. The duty to disclose known adverse documents is continuing and also applies from the date of the order.
4) Court Control
As a separate guard against defaulting unnecessarily to the equivalent of what was “Standard Disclosure”, courts are encouraged to be proactive and may make any order for Extended Disclosure that they consider reasonable and proportionate, whatever the parties may have agreed in the DRD. The court is also empowered to impose penalties on parties that fail to comply with the scheme.
The pilot scheme also expressly imposes a number of duties derived from (and formerly implicit in) the old regime. These include duties on the parties to preserve documents, comply with orders, undertake searches reasonably and conscientiously, act honestly and avoid “document dumping” i.e. providing irrelevant documents. In addition, legal representatives must promote cost-efficient and reasonable disclosure (including through technology), which will require them to adopt a co-operative approach.
Conclusion and Take-Home Points
The new scheme complements reforms in other areas of English litigation, in that it involves a collaborative process and reinforces the need for more “front-loading” of cases than previously. It serves as a reminder for parties to ascertain their disclosure position at an early stage. In particular, the importance of having comprehensive document retention policies, ensuring that they are followed, and issuing clear and timely “litigation hold” communications cannot be overstated.
The scheme is still in its early days, but it remains to be seen whether or not it will achieve the aim of reducing the volume of disclosure. The scheme presumes co-operation between the parties and a degree of judicial activism. Further, given that Initial Disclosure will not apply in a variety of circumstances, and given the scope for reverting to something similar to the old “Standard Disclosure” (Extended Disclosure Model D being the closest) despite mechanisms designed to discourage this, the scheme may prove more beneficial to smaller cases, without making a significant difference in larger cases.
Regardless, parties would be well-advised to familiarise themselves with the new rules, since, if the scheme is ultimately deemed a success, it is likely to be rolled out across other English and Welsh courts.
For further information, please contact the authors.
Compliments of Holland & Knight LLP, a member of the EACCNY