18 April 2019
Disclosure Pilot Scheme in operation
Extensive changes to the disclosure process mean that litigators and parties are likely to be subject to greater accountability and increased obligations at a far earlier stage. Companies and individuals alike need to be aware of the changes, to avoid falling foul of the new rules. A brief overview of the scheme is set out below. For more details, please contact a member of B P Collins’ dispute resolution team.
Following recommendations by the Disclosure Working Group chaired by Dame Elizabeth Gloster, in an effort to reduce the extent of documents involved in disclosure, a new Disclosure Pilot Scheme (the “Pilot”) has been in operation with effect from 1 January 2019 across the Business and Property Courts in England and Wales. If successful, it is likely to be rolled-out to other courts in January 2021, or perhaps even sooner.
The Pilot rules apply automatically to new and existing proceedings across a number of courts including the Chancery Division, Commercial Court, Technology and Construction Court and the Circuit Commercial Court in both High Court and District Registries. The rules impose wholesale changes on the process and ethos of disclosure in litigation, and impose far greater accountability on lawyers and parties responsible for conducting searches.
The new regime represents a shift away from using standard disclosure as a starting point in all cases, whereby parties were previously required to search for documents that supported or were adverse to their own case or the opposition’s case and then identify those documents by list and allow inspection, all of which tended to take place mid-way through the court process and usually after the case management conference stage.
The Pilot rules fuse together the concepts of disclosure and inspection and the whole disclosure process has been frontloaded, requiring Initial Disclosure to be provided at the Statements of Case stage (i.e. when the claim is initially issued and defended). The Initial Disclosure must include all key documents relied on or necessary to understand the case to be met. For some cases, that requirement might effectively oblige disclosure at the outset of litigation of all documents, which might ordinarily have been disclosure at a far later date.
There are exceptions to the Initial Disclosure obligations, namely: where the court makes an alternative order, the parties agree an alternative, or the extent of the exercise makes it impracticable. However, for the time being at least and until the practical application of the new rules becomes clearer, litigants and parties in the relevant courts should now be working on the basis that they will be required to give Initial Disclosure and prepare their case accordingly.
Following Initial Disclosure, the court can order Extended Disclosure. There is no automatic right to Extended Disclosure and parties will need to produce a new List of Issue for Disclosure within 28 days of the last Statement of Case, to say what further disclosure they are seeking and why. Any dispute about the extent of further disclosure required will be determined at a new Disclosure Guidance Hearing.
If further disclosure is ordered, it will follow the form of one of five new models, which provide for disclosure of adverse documents only (Model A), adverse documents plus limited further disclosure of “key” documents (Model B), adverse documents plus documents from request-led searches related to specific issues (Model C), adverse documents plus documents from a narrow search relating to the Issues for Disclosure (Model D) and adverse documents plus documents from a wide search and including “train of enquiry” documents, that might lead to the discovery of other documents (Model E).
At the time of giving disclosure, parties must serve a new Disclosure Certificate requiring a statement of truth, signed by the party giving disclosure, confirming that all known adverse documents have been disclosed. The form must identify the person signing the statement of truth, and explain why he or she is considered to be the appropriate person to sign that statement. The Pilot expressly empowers the court to use its full range of sanctions to enforce compliance, including refusing to order Extended Disclosure, adverse costs orders and to committal. The clear aim is that parties and representatives will be held accountable for a failure to comply.
Two further significant changes are, firstly, that extensive additional duties are now placed expressly on legal practitioners as well as the parties and, secondly, there is an obligation on parties to search for and disclose adverse documents, which they are aware have been or are in their control. For organisations, establishing awareness could potentially be very onerous. It will mean looking beyond the awareness of existing directors and senior management and considering whether individual employees - as well as former employees - at all levels are, or were, aware of any adverse documents that need to be disclosed. As part of that investigation, organisations must send written notices to employees and former employees, identifying documents or classes of documents that need to be preserved. They will need to think carefully about their internal policies and contracts, so that they can show that document retention policies are in effect if and when they are faced with litigation.
These are all issues that need to be considered at the very outset of a dispute, notwithstanding the fact that the vast majority of cases will settle long before a claim is issued at court.