Proposals have been announced for a two-year pilot scheme, starting later this year, involving the introduction of new disclosure rules in the Business and Property Courts in England and Wales. The Disclosure Working Group is seeking views on the proposals in a consultation which is open until the end of February 2018.
In recent years the scale, complexity and costs of disclosure have increased significantly, leading to growing calls for significant changes to the disclosure regime set out in the Civil Procedure Rules (CPR). The CPR came into force over 18 years ago and, despite the Jackson reforms of 2013, many feel that the current system, which was originally developed with paper documents in mind, is no longer suitable for the large volumes of electronic data that are common in today’s disclosure exercises. A survey carried out by the London Solicitors Litigation Association and the New Law Journal last year found that over 70% of respondents felt that the current rules have not managed to keep the burden and costs of disclosure under control and that technology-based solutions are not used widely enough.
Disclosure Working Group
Against this backdrop, a Disclosure Working Group was established in May 2016 by the then Chancellor of the High Court (Sir Terence Etherton, now Master of the Rolls). The Working Group, chaired by Lady Justice Gloster, was tasked with identifying problems with the disclosure process and finding a practical solution. The intention was to encourage a more practical and proportionate approach.
The Working Group found some key defects with the current regime, including:
- The intention of the Standard Disclosure test introduced in the CPR was to reduce the volume and costs of disclosure. In fact, the volume of potentially disclosable documents has greatly increased, often to unmanageable proportions.
- Neither the legal profession nor the judiciary have made adequate use of the range of alternative orders that became available under CPR 31.5(7), following the 2013 Jackson reforms. Standard Disclosure has remained the default option.
- The existing rules are not fit for purpose when it comes to dealing with electronic data.
- Disclosure orders are not sufficiently focused on the issues in the case.
- There is often inadequate engagement between the parties about disclosure before the first Case Management Conference (CMC) and disclosure searches are often much wider than necessary.
The unanimous view of the Working Group was that “a wholesale cultural change is required and that this can only be achieved by a widespread promulgation of a completely new rule and guidelines on disclosure”.
Details of the proposals are contained in a Briefing Note, draft Practice Direction (PD) and a new draft Disclosure Review Document (DRD), which is designed to guide parties through the disclosure process and give them a means of recording their decisions.
Disclosure proposals: Key points of interest
The proposed changes to the current rules will be trialled as part of the pilot scheme that is due to take place later this year. They include the following:
- Standard Disclosure (that is, the disclosure of documents which support or adversely affect the case of any of the parties to the dispute) will cease to exist in its current form. Its replacement should not be ordered in every case and will not be regarded as the default option.
- The rules will expressly set out the duties of parties and their legal representatives in relation to disclosure. They will include a duty to cooperate with each other to promote the efficient conduct of disclosure, including through the use of technology.
- The duty to disclose known documents that are adverse to the disclosing party will remain a core obligation. It should be complied with, regardless of the type of disclosure order made by the court, and will apply even if the court makes no disclosure order.
- A concept of Basic Disclosure will be introduced. Unless the parties agree to dispense with it, this will involve the disclosure, at the same time as serving statements of case, of key/limited documents which are relied on by the disclosing party and are necessary for the other parties to understand the case they have to meet. Importantly, Basic Disclosure would not require a party to disclose known adverse documents at the outset of a claim.
- If the parties want to go beyond Basic Disclosure, they should use a joint DRD as a framework and do the following: (a) list the main issues in the case for the purposes of disclosure; (b) exchange proposals for Extended Disclosure (see below); (c) and share information about how the documents are stored and how they might be searched and reviewed with the assistance of technology. This process will be carried out after the close of statements of case and before the first CMC.
- The DRD will replace the current Electronic Documents Questionnaire and will include the parties’ proposals for Extended Disclosure, allowing them to specify which Disclosure Model should be used for each disclosure issue.
- Form H cost budgets for disclosure should be completed after an order for disclosure has been made, rather than before. When completing the DRD, parties will be required to give estimates of the likely costs of disclosure so that the question of proportionality can be considered by the court at the CMC before a disclosure order is made.
- There will be five models for Extended Disclosure:
- Model A: No order for disclosure.
- Model B: Limited disclosure. This would require the disclosure of documents on which a party relies, including known adverse documents, without the need for a further search.
- Model C: Request-led, search-based disclosure. Each party would be able to request specific disclosure from the other party with a requirement to carry out a search and produce adverse documents.
- Model D: Formerly known as Standard Disclosure. As with each Model, the Court would be need to be satisfied that the use of the model would be reasonable, appropriate and proportionate in order to fairly resolve the issue.
- Model E: Exceptional disclosure. This would extend the reasonable search required under Model D and might lead to disclosure based on a train of enquiry which might support or adversely affect either side’s case on the issue.
The Working Group is seeking views on the draft Practice Direction and DRD from the judiciary, professional associations and user groups by 28 February 2018. It is expected that the pilot scheme will be submitted to the Civil Procedure Rules Committee for review and approval in March/April 2018. After that, the pilot will run for two years in the Business and Property Courts in the Rolls Building in London and in the court centres of Bristol, Cardiff, Birmingham, Manchester, Leeds, Newcastle and Liverpoool.
Wholesale cultural change
The Working Group’s reference to the need for a “wholesale cultural change” suggests that the proposed new rules will require a major shift in professional attitudes towards disclosure and entail a move towards more proactive, robust judicial management of this part of the litigation process.
If the proposals are implemented, litigants will no longer be automatically entitled to search-based disclosure. It will be at the court’s discretion whether to make an order for Extended Disclosure, based on one of the five models, if there has been sufficient engagement between the parties before the first CMC. This new approach is designed to encourage both flexibility and proportionality, and to maintain the ability of litigants in this jurisdiction to obtain orders from the court that their opponent disclose documents which are adverse to its case. With the spectre of Brexit looming, the Working Group also considers that the changes would highlight the strength of English law and the English dispute resolution system internationally, and its ability to keep pace with technology.
Technology and disclosure
The use of technology to aid the collection, storage and review of large volumes of electronic documents has long been a feature of the disclosure process and it is perhaps surprising that a radical overhaul of the current rules has not been proposed until now.
In 2016, a landmark ruling on the use of predictive coding in disclosure was handed down by the High Court. In the case of Pyrrho Investments v MWB Property, Master Matthews allowed predictive coding to be used in order to avoid the enormous expense that would otherwise have been incurred if a manual search of some three million electronic documents had been required. The use of this technology has already been sanctioned in other jurisdictions, but this ruling marked the first time that an English court had approved it. The decision in Pyrrho has since been reaffirmed by the High Court in Brown v BCA Trading Ltd.
The use of specialised document-management and disclosure software and technology-assisted review techniques will no doubt only increase in the coming years, reflecting the increasing use of automation and tech-led solutions across the legal profession generally. The decisions in Pyrrho and Brown indicate that the courts are now willing to recognise this.
Across the global economy, the application of technology has been a driving force in the reduction in the cost of services. As far as legal services are concerned, clients increasingly expect their lawyers to provide innovative solutions to their legal problems and to carry out work efficiently and at reduced cost while maintaining the same level of service. If law firms are to meet these expectations, then embracing the use of litigation technology will be crucial, whether in terms of improving the project management of cases or running disclosure exercises more efficiently.
It seems very likely that the disclosure pilot scheme will go ahead later this year and that a permanent overhaul of the rules will follow in some shape or form. Law firms and prospective litigants should take note of the changes and start thinking about the adaptations they will need to make to comply with the new rules when they do eventually come into force.
Embracing the use of technology as an important tool in managing the disclosure process will be crucial. The Working Group’s proposals recognise that the CPR needs to catch up with developments in technology and the courts are becoming increasingly comfortable with its use in relation to disclosure, so law firms and their clients alike will need to get ready.
Authors: Tim Crockford and Ed Cotton