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One Month to go: the new Disclosure Pilot scheme arrives in January

Aim of the Disclosure Pilot Scheme

The Chancellor established a working group in 2016 with the unenviable task of taming the excesses and abuses of Standard Disclosure.

Previous attempts to manage disclosure - in particular through the 2013 Jackson reforms, have been largely unsuccessful.

The majority of litigation still results in costly and time-consuming standard disclosure as a go to option – arguably because it is what we know best.

With 90% of the world's data created in the last two years, the burden of disclosure also seems only like to grow unless tackled.

The 1 January 2019 launch of the Disclosure Pilot Scheme is the product of the Chancellor's working group and the latest attempt to curb disclosure excess. 

It will to apply to existing and new proceedings across the Business and Property Courts in the Rolls Building and in the key centres for a two-year period. If successful, there is an expectation that the pilot will be rolled out more widely.

Key procedural features of the pilot

  • Document preservation is now more prescriptive. There are obligations on legal advisors to advise on a party's duties and seek confirmation that they have been complied with.
  • With limited exceptions, Initial Disclosure will have to be served at the same time as pleadings are served. Initial Disclosure is the key documents on which they rely to support their claim or defence and which are necessary for the other party to understand the case put against them.
  • Standard Disclosure will no longer be the default approach. Instead, the first stage (unless the parties agree otherwise) will be Initial Disclosure.
  • Each of the parties will be able to request Extended Disclosure, which can take a number of different forms (see below). This must be requested within 28 days of the final statement of case.
  • The parties must apply for Extended Disclosure by completing a joint 'Disclosure Review Document' (DRD). This will set out the key issues, share information regarding the storage of documents and set out each party's proposal with regard to Extended Disclosure. This must be filed ahead of the first Case Management Conference (CMC).
  • The DRD replaces the current Electronic Documents Questionnaire, previously only dealt with as a non-mandatory addition to the disclosure process. The DRD specifically refers to the parties collaborating in the use of technology to ensure an efficient and cost-effective approach to disclosure. This places electronic disclosure at the heart of the disclosure process.
  • At the CMC, the court will proactively review the parties' proposals. It will also have the ability to refuse and change the proposed Extended Disclosure approach. The parties will be obliged to keep the DRD up to date throughout the litigation.

What's on the disclosure menu?

In the event that the parties request Extended Disclosure, they will now have the benefit of a 'menu' of five options to apply.

Disclosure confined to known adverse documents (A)

The court may order that the only disclosure required, in relation to some or all of the Issues, is known adverse documents (continuing duty).

Limited Disclosure (B)

The court may order the parties to disclose the key documents (1) on which they have relied (expressly or otherwise) in support of the claims or defences advanced in their statement(s) of case; (2) are necessary to enable the other parties to understand the claim or defence they have to meet; and (3) known adverse documents (continuing duty).

Request-led search-based disclosure (C)

The court may order a party to give disclosure of particular documents or narrow classes of documents relating to a particular issue for disclosure, by reference to requests set out by the other party in the DRD.

Narrow search-based disclosure, with or without Narrative Documents (D)

A party may be ordered to disclose documents that are likely to support or adversely affect its claim or defence or that of another party in relation to one or more of the issues for disclosure. Each party must undertake a reasonable and proportionate search in relation to the issues. Any appropriate limits to the scope of the searches to be undertaken will be determined by the court using the information provided in the DRD.

Wide search-based disclosure (E)

 

Only to be ordered in exceptional circumstances. A court may order that a party discloses documents that are likely to support or adversely affect its claim or, which may lead to a train of inquiry that could result in the identification of other documents for disclosure. Narrative documents will also have to be provided.

Only (C) to (E) will require parties to conduct an actual search for documents.

This will, in theory, provide parties with the flexibility to choose between a light touch approach and, where required, a more comprehensive process. This should ensure that the disclosure process is more targeted to the litigation in question.

Challenges and opportunities

  • Preservation of documents is more prescriptive and there are punitive cost consequences (as opposed to just inferences of fact) if it is not completed properly.
  • Initial Disclosure will potentially lead to an increase in costs at the pleadings stage. Not only will the documents have to be disclosed but also a List of Documents and an explanation of what searches have been undertaken has to be provided. However, early on, you will be able to make sure that the opponent is completing relevant searches (so key documents don’t disappear) and understand the key documents that support their case.
  • Under the Pilot, the parties must seek to agree how extended disclosure is completed, what technology assisted review software is used, coding strategies and other ways to locate and manipulate data – or the Court can make wide ranging orders.
  • The steps taken to preserve documents have to be reasonable. It is important to make the right decision as this will impact on what disclosure is provided under options (A) and (B).

Without a comprehensive understanding of the technology options and strategies and the costs involved, you could be saddled with a costly disclosure process and/ or an ineffective approach to disclosure, which means your case is disadvantaged.

What do you need to think about now?

  • Review your document preservation process and documents to make sure they are compliant.
  • With business as usual cases, consider what initial searches are appropriate bearing in mind that this will form the basis to any Initial Disclosure.
  • Are you able to assess if automated data capture or review would be more cost effective approach than a manual process?
  • Do you have access to technology solutions/ expertise or a range of vendors to provide you with an effective and economic solution for data capture and review?

How TLT can assist?

We have a team of disclosure experts who understand the changes in the new regime and the opportunities this might present.

We have a thorough understanding of the automatic document review technology and have access to a panel of vendors; recognising that one solution does not fit all cases.

We are also used to helping in revising 'legal holds' processes and documents.

For more information on how TLT can help your business, please contact Neil Franklin, Partner and financial services disputes expert.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at November 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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