The Disclosure pilot scheme in the Business and Property Courts

A new mandatory disclosure pilot scheme has been operating in the Business and Property Courts since 1 January 2019 and will be in place for at least two years. The scheme applies to new and existing proceedings in the specified courts in which the CMC will take place after 1 January 2019.

The scheme came about because it was felt that parties were not co-operating sufficiently on disclosure issues, searches were often too wide and unnecessary, and the disclosure process had failed to develop an adequate regime for dealing with electronic data.

The rules for the scheme are set out in CPR Practice Direction 51U.

The disclosure pilot scheme is not yet applicable to claims brought in the County Courts but this may change over the course of the pilot scheme.

Key procedural changes

The process for giving disclosure of documents has changed quite significantly. There is now an emphasis on co-operation between the parties and restricting the quantity of documents disclosed. There is also a significant shift towards documents being disclosed in electronic form.

Initial Disclosure

This is the first stage of the new disclosure process as implemented by the disclosure pilot scheme. Parties must provide to all other parties at the same time as its statement of case an Initial Disclosure List of Documents that lists and is accompanied by copies of the key documents on which the party has relied and the key documents that are necessary to enable the other parties to understand the claim or defence.

Known adverse documents do not need to be disclosed and there is no obligation to search for documents at this stage of the process.

Parties can agree to dispense with Initial Disclosure and there is no obligation to provide it where there are more than 1,000 pages. It is also not required when serving proceedings out of the jurisdiction of England and Wales.

When a statement of case is filed with the court the List of Documents only i.e. not the documents themselves, must be given to the court at the same time.

Disclosure Review Document

The Disclosure Review Document replaces the disclosure report and electronic documents questionnaire. One Disclosure Review Document should be completed and ideally agreed between the parties, this document is then filed with the court before the first CMC. It facilities exchange of information and provides a framework for discussions between the parties in respect of the documents to be disclosed.

An increased level of co-operation with the other parties is essential when completing the Disclosure Review Document. It is envisaged that this change will help parties to agree a sensible and cost effective approach to the disclosure process and will provide the court with the information it needs to case manage.

The parties’ obligation to complete, seek to agree and update the document is ongoing.

Extended Disclosure

It will become evident from the Disclosure Review Document what further disclosure is required over and above that provided with by way of Initial Disclosure. A party wishing to seek disclosure of documents in addition to, or as an alternative to, Initial Disclosure must request Extended Disclosure.

Extended Disclosure involves using Disclosure Models. A Disclosure Model must be requested for each issue identified in the Disclosure Review Document and approved by the court at the first CMC. The models are summarised below:-

• Model A – only adverse documents need to be disclosed, this must be done within 30 days after the first CMC and there is no search obligation
• Model B – key documents relied on in statements of case, key documents necessary to enable the other parties to understand the case and known adverse documents must be disclosed, and there is no search obligation
• Model C – request led search based disclosure to include key documents on which a party has relied on in their statements of case and known adverse documents
• Model D – the party must undertake a reasonable search for documents that support or adversely affect either side’s case, with or without narrative documents (this is the closest model to standard disclosure)
• Model E – a search must be undertaken for documents that may lead to a train of enquiry that may support or adversely affect either party’s case on the issues (only granted in exceptional cases)

The expectation is that documents will be provided with the List of Documents so the concept of inspection (i.e. reviewing the listing and then asking for copies of certain documents) does not arise anymore. The rules also prescribe that the disclosable documents are provided in electronic form.

Sanctions

Failure to comply with Initial Disclosure, constructively engage in completion of the Disclosure Review Document, comply with an order for Extended Disclosure or produce documents within the specified time, may lead to an adverse costs order, dismissal of an application for Extended Disclosure and/or adjournment of the CMC with a potential costs sanction.

Legal representative’s duties

The legal representative has some new (and some continuing) duties with regards to disclosure. The duties can be summarised as follows:-

• Take reasonable steps to preserve documents;
• Take all reasonable steps to assist and cause the party to comply with its duties;
• Liaise and co-operate with the legal representatives of the other parties;
• Act honestly; and
• Review documents for privilege.

Client’s duties

Following the implementation of the new scheme, it is vital that legal representatives inform their clients of their duties with regards to documents. The key points that clients should be advised to do are:-

• Preserve documents that may be relevant as soon as they are aware they are involved in, or could possibly be involved in, relevant litigation;
• Disclose documents it knows to be or to have been in its control and adverse to its case or the claim;
• Comply with any order for disclosure;
• Undertake document searches in a responsible and conscientious manner;
• Act honestly; and
• Do not “document dump”

Summary

In addition to the anticipated costs saving of the new disclosure process, it is envisaged that parties and their legal representatives will be aware of the potential weaknesses in their position based on the documents from an early stage. It should also focus the minds of parties to the work required throughout the litigation process so that proceedings aren’t issued lightly.

It is yet to be seen how much the Court will scrutinise the model of Extended Disclosure requested by the parties but the guidance suggests that the parties should not just expect the model they have chosen as recorded in the Disclosure Review Document to be granted, they should be in a position to justify why they have chosen each model at the CMC. Clients must also be able to show that where relevant they have complied with their obligations to preserve documents by means of, for example, changing their processes for destruction of data and advising potentially related third parties to do the same.