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disclosure rule changes – are you ready?

11 December 2018

This article is taken from December's public matters newsletter. Click here to view more articles from this issue.


From 1 January 2019 there will be a two year pilot practice direction relating to disclosure in operation in the Business and Property Courts. The pilot is mandatory and if successful wholesale changes are likely to the rules on disclosure across the board. It is important that organisations who regularly litigate in the Business and Property Courts are well-prepared for the pilot and to review their litigation hold procedures.

Background

A Disclosure Working Group was created in May 2016 at the initiative of Sir Terence Etherton to propose reforms to the disclosure process governed by Part 31 of the Civil Procedure Rules (CPR 31). The initiative followed concerns expressed in a number of quarters about how fit for purpose the current disclosure rules are. The rules date back some time and it has been felt that they do not adequately deal with the question of electronic disclosure (and the proliferation of documentation created in this way). In addition there have been significant criticisms of standard disclosure and how frequently it becomes complex and large-scale with the increase in costs that come with it. This leads to accusations that the costs associated with standard disclosure are disproportionately high.

Following a two year review the new pilot is ready to be launched. The new Practice Direction can be found here.

Which cases will the Practice Direction capture?

The pilot will apply to both new and existing actions in the Business and Property Courts unless an order for disclosure has already been made under the old rules before 1 January 2019.

There are a few exceptions and the new pilot will not apply to the following cases:

  • public procurement claims
  • claims falling within the Shorter and Flexible Trials Schemes
  • competition claims
  • claims in the Intellectual Property and Enterprise Court
  • admiralty claims
  • claims falling within the fixed costs or capped costs regimes.

Disclosure duties

The Practice Direction imposes disclosure duties both on the parties themselves but also on the legal representatives. The duties can be summarised as follows.

Disclosure duties on the parties to:

  • preserve documents
  • undertake any search in a responsible and conscientious manner
  • act honestly in relation to the process of giving disclosure
  • disclose known adverse documents, regardless of whether an order for Extended Disclosure (see below) is sought or made, unless they are privileged
  • comply with any order for disclosure made by the court
  • not to ‘document dump’.

Disclosure duties on legal representatives to:

  • take all reasonable steps to advise and assist the party to comply with its disclosure duties
  • liaise and cooperate with the legal representatives of the other parties to promote the reliable, efficient and cost-effective conduct of disclosure
  • undertake a review to ensure any claim to privilege is properly made and its basis sufficiently explained.

Preservation of documents

There is a need to preserve documentation very early on in the process; from the moment you know that you are about to be subject to court proceedings or may become a party to proceedings. Therefore parties will need to record the process from notifying the relevant personnel to recording what searches are made. This will front-load the process and will involve more costs being incurred in the pre-litigation process.

The steps that need to be taken are:

  • ensuring that relevant documents are not deleted or destroyed and suspend any relevant document destruction processes
  • sending a written notification, in any form, to ‘all relevant employees and former employees’
  • taking reasonable steps so that agents or third parties who may hold documents on your behalf do not delete or destroy them
  • the preservation notice should identify the documents or classes of documents to be preserved

Initial Disclosure

This will now be provided at the same time as the service of the first statement of case. This is the Initial Disclosure List of Documents, plus the actual documents.

The documents to be disclosed are referred to as key documents so the documents that:

  • on which a party has relied (expressly or otherwise) in support of the particular statement of case, and
  • that are necessary to enable the other parties to understand the claim or defence they have to meet.

There are a number of requirements to be considered:

  • the documents should be served electronically (but not filed – only the List is filed)
  • there should be a maximum of 1000 pages/200 documents
  • no obligation at this stage to serve adverse documents
  • you do not have to serve documents the other side has
  • the process can be dispensed with by agreement between the parties, giving reasons.

Extended Disclosure

There may not be a need for further disclosure; it is not automatic. If a party wants further disclosure then it needs to say so within 28 days of service of the final statement of case. If this is required then a Disclosure Review Document requires completion which will list the issues for disclosure in the case and exchange proposals for extended disclosure.

There are five disclosure models:

  • Model A: disclosure confined to known adverse documents
  • Model B: Limited Disclosure (documents on which you rely plus any known adverse documents of which you are aware without the need for a further search)
  • Model C: request-led, search-based disclosure for particular documents or narrow classes of documents relating to a particular Issue for Disclosure
  • Model D: search based disclosure for documents which are likely to support or adversely affect either party’s case on one or more of the Issues for Disclosure. Similar to standard disclosure, but with some options around disclosure of ‘narrative’ documents
  • Model E: wider search based disclosure for instance, train of enquiry.

It is at this stage that adverse documents must be disclosed.

Extended disclosure is complied with when parties:

  • serve a disclosure certificate – certifying that reasonable steps have been taken to preserve documents and all known adverse documents have been disclosed (except where privileged)
  • serve an extended disclosure list of documents (unless dispensed with by agreement/order
  • produce the disclosed documents.

What are the relevant issues for disclosure?

The claimant is under a duty prepare a draft List of Issues for disclosure and serve it on the other parties within 42 days of the final statement of case. The ‘Issues for Disclosure’ are:

  • only those key issues in dispute, which the parties consider will need to be determined by the court with some reference to contemporaneous documents in order for there to be a fair resolution of the proceedings
  • it does not extend to every issue which is disputed in the statements of case by denial or non-admission.

The Issues are documented in section 1A of the Disclosure Review Document. Alternative issues can be suggested and the parties must discuss and seek to agree the List of Issues for Disclosure in advance of the case management conference. The parties may re-visit the List of Issues for Disclosure at any time and make suitable amendments.

Practical considerations

We would recommend that our clients prepare for the introduction of the pilot and perhaps look at the following issues:

  1. Do you have any current cases where it may be prudent to agree directions before the new pilot comes into effect? Alternatively do you have cases that you would prefer to become subject to the new rules?
  2. Are your staff aware of the new rules? It would also be worthwhile preparing standard documents in advance of 1 January so that you are prepared for the new regime and so that your staff know the litigation hold procedures.

We will be monitoring what our clients think of the new regime and will be feeding comments back as to how it operates in practice. We would welcome your views. Please email Nichola Evans with any thoughts you have.


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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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