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Disclosure Pilot Scheme to start in January 2019

29 October 2018

The Civil Procedure Rule Committee has approved the new Practice Direction which sets down rules for a mandatory disclosure pilot scheme. It will run for two years in the Business and Property Courts in England and Wales, starting on 1 January 2019.

Basis for reform

Reasons behind the reforms include a need to modernise and tackle the proliferation of electronic material, as well as reduce the increasing cost of litigation in England and Wales. The reforms are timely. As Brexit approaches, other European jurisdictions are positioning themselves to compete with London’s Commercial Court; rival offerings have appeared in Brussels, Paris and (before long) Amsterdam.

What’s new?

The rules are largely in the form of the draft proposal circulated towards the end of 2017. Our article commenting on the draft is here.

In summary:

  • Standard disclosure has been discarded.  In its place is a “menu” of options (‘Models’) to be ordered by reference to the particular issues in a case. Model D restates standard disclosure, so the current test will still be available where appropriate.
  • Duties of the parties and their lawyers are expressly set out. These include a duty to cooperate in order to promote reliable, efficient and cost-effective conduct of disclosure.
  • A requirement to disclose known adverse documents remains in all cases.
  • “Initial disclosure” will be given with statements of case. This will consist of the key documents relied upon, and those necessary for other parties to understand the case to be met. The process is intended to be light, with a cap of 200 documents or 1,000 pages of material. In some cases it may be dispensed with entirely.
  • Before the Case Management Conference (‘CMC’), the parties should discuss and complete a joint “Disclosure Review Document” (‘DRD’). This will list the issues in the case which require disclosure and allow parties to exchange proposals for “Extended Disclosure”, including which Model should apply for each issue. The DRD will also allow parties to share practical information, such as how documents are stored, how searches might be undertaken and how the review process should be handled. Parties will be under an express duty to cooperate and engage before the CMC.
  • At the CMC, the Court will determine which of five available Models is to apply to each issue requiring Extended Disclosure. These range from covering just those adverse documents which are known to exist (Model A) through to an extended version of standard disclosure which also encompasses documents which could “lead to a train of enquiry which may then result in the identification of other documents for disclosure” (Model E).
  • The Court will proactively direct which is the appropriate Model for each issue by reference to principles of reasonableness and proportionality. It will not simply accept parties’ proposals.
  • The Court will be available to assist the parties through “Disclosure Guidance Hearings”, providing “informal” guidance on how to bridge any differences arising.

Commentary

The new rules aim to preserve key features of our current system, and the ability to obtain known adverse documents in particular. By matching appropriate standards of disclosure to specific issues, the intention is to arrive at a highly efficient and flexible process, able to manage the volume of documents created in business today. Whilst standard disclosure is generally adopted in most cases at present, parties have frequently adopted a more generous standard in practice. This has resulted in swathes of irrelevant material being captured for review and disclosure, and change of some sort or another was overdue.

There remains some concern as to whether the increased complexity associated with a need to handle a range of disclosure standards across different issues will increase costs - particularly in larger cases. There is little doubt that greater use of technology will be required in order to manage these cases efficiently. This in itself will present opportunities, with nimble and efficient parties being better equipped to compete with larger opponents, without being overwhelmed during the disclosure phase.

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