Disclosure Pilot Proposals
OVERVIEW OF THE DISCLOSURE WORKING GROUP REFORM PROPOSALS
CHIEF MASTER MARSH AND MR JUSTICE ROBIN KNOWLES CBE
23 JANUARY 2018
1.1 The excessive costs of disclosure, resulting in many clients taking litigation abroad, has led to interest in potential changes to the current disclosure process by Master of the Rolls. Lady Justice Gloster set up the Working Group in 2016 to tackle the problem and propose a solution.
1.2 CPR Part 31 from the Woolf Reforms are no longer functioning well. The rule is rooted in a paper-based disclosure exercise and this does not accommodate the modern data landscape, which can see hundreds of thousands of documents caught in a disclosure exercise.
1.3 There is a need to draft an entirely new rule to effect a culture change in relation to disclosure. Currently, the orders available under CPR 31.5(7) are not adequately utilised as the default is for parties to adopt standard disclosure.
1.4 Disclosure is a tool to find the most fair and just outcome. However it can also lead to unnecessary cost and confusion. The new rule will help ensure proper processes are in place for disclosure and will aim to simplify matters significantly e.g. reducing the need to refer to the 7,000 page White Book.
1.5 The new regime will encourage parties to focus on what is needed in the case, and provide flexibility to determine what is required to meet that need.
1.6 There will be an expectation of cooperation between professionals and involvement from the Judges in relation to the new regime.
1.7 It will aim to provide tailored and more cost effective disclosure for clients, and expects parties and their advisors not to treat disclosure as mere routine e.g. standard disclosure across the board with increased costs.
1.8 There are carve-outs within the new rules to help shape the best choice for the specific case.
2 BASIC DISCLOSURE
2.1 Basic disclosure will be provided to the other party with statement of case. Basic disclosure comprises the core documents relied upon to produce the statement of case and those documents required to enable the other party to understand the case.
2.2 It is similar to Part 8 claims and arbitration cases where all documents are required upfront with the statement of case. It is anticipated that the documents will be very similar to those provided in compliant pre-action correspondence.
2.3 In relation to the concern regarding potential front-loading of costs, Chief Master Marsh considered this is overstated. Basic disclosure aims to flush out the core documents in the case and provides a context for a targeted application for extended disclosure. It will help get across that it is not in every case that standard disclosure is required.
2.4 There are 6 exceptions to the requirement to provide basic disclosure. In summary, parties can agree to opt out of basic disclosure. Parties wishing to opt out are required to give reasons otherwise the Judge may question this. In addition, if the documents which would comprise basic disclosure exceed 500 pages, basic disclosure will not operate.
3 EXTENDED DISCLOSURE
3.1 If basic disclosure has taken place and is sufficient, extended disclosure is not required. Any adverse documents in a case where no extended disclosure is ordered will have to be disclosed within 30 days of the case management hearing in any event.
3.2 The necessity for provision of adverse documents was acknowledged. The revised disclosure rules are not intended to reduce this obligation. It was made clear that provision of adverse documents remains a key part of the English and Welsh legal system.
3.3 There are 5 models offering various request and search options for extended disclosure.
3.4 There are 2 relevant tools to aid the process:
3.4.1 Disclosure Review Document (DRD); and
3.4.2 List of disclosure issues.
3.5 Standard disclosure appears within the range of options (it roughly correlates with Model D) but will not be relevant to all issues. It is not anticipated that this will be the standard model.
4 DISCLOSURE REVIEW DOCUMENT (“DRD”)
4.1 One perceived problem is that the Court at a Case Management Conference (CMC) might not be given the required information to make decisions under the current regime/Part 31. The Jackson list in Part 31 has not been widely implemented.
4.2 DRD is a device requiring engagement between the parties. It is a single document completed by both parties, and not exchanged or served as such but created jointly. When statements of case have been served including any Reply, the Claimant produces the DRD by populating the relevant parts of the document and explaining the disclosure issues it feels are relevant.
4.3 The Claimant will identify where electronic disclosure is required as part of this process. The document is then passed to the Defendant who carries out a similar exercise so that the Court can then see where the parties are in agreement.
4.4 The DRD itself was simplified following trials but the general feedback was that it was a useful tool, funnelling the engagement between parties into one place. Often exchanges before the CMC are complex. The process should not lead to increased costs but should lead to a greater degree of engagement leading to more information regarding the relevant issues.
4.5 A Disclosure Guidance Hearing will be relevant in some cases to clarify the disclosure that should be provided. These will be no more than 30 minutes in length with no more than 30 minutes pre-reading for the Judge. In this type of hearing, there would be no need to brief counsel, and parties can go directly to the Judge. Costs will generally be in the case, and as such the risk of an adverse costs order being made is also reduced. These hearings will only be needed in exceptional cases.
4.6 Disclosure is a major tactical battleground at the moment.
5 WHAT LIES AHEAD?
5.1 In relation to costs budgeting and case management, the new rules aim to preserve the opportunity for these to be dealt with together. Disclosure will be ordered at the CMC, and the cost budget phase updated as appropriate after this.
5.2 A pilot will be introduced in the B&PCs across England and Wales, including Leeds. The pilot will be 2 years in length and there will be a stage of consideration by the Civil Procedure Rule Committee following the exercises.
5.3 Any drafting points/advice from those dealing with disclosure and the pilot in practice will be welcomed.
Q – (Pre submitted question) In light of Brexit and increasing litigation in other jurisdictions, will the pilot simply cause further issues?
A – No, it will probably help as it is offering an opportunity for more focus on disclosure and will preserve disclosure as an important part of our system. It is also important to make sure disclosure does not carry the reputation of unnecessary expense.
Q – Do the proposed rules on extended disclosure render the existing rules on specific disclosure obsolete?
A – No but there will be a reduced need for specific disclosure. The new rule provides as follows:
1. Require a party to do what they should have done on disclosure originally again; and
2. A raised threshold for a second application in order to discourage parties from having two bites of the cherry if they are not satisfied with the disclosure provided.
Q – Are the Courts envisaging different approaches to disclosure in relation to different issues?
A – Yes e.g. in damages claims you serve the documents you rely on and it shouldn’t be necessary to conduct a full search.
Q – In terms of parties not using the current menu of options flexibly – what is the cause of this?
1. The way the rules have been added to e.g. in the Jackson Reforms, could be laid out more accessibly; and
2. People have approached each increment with a mind-set that is “business as usual”. Here is a chance to start afresh. We have a chance to drive a required culture shift now.
Q – In relation to the 500 page limit – is there a risk that parties will say they have more than 500 pages so that they are automatically exempt?
A – Yes there is a risk. All rules are capable of being misused e.g. statements of case are often too long. The 500 page limit is arbitrary and there is an opportunity to raise it at the CMC. If there is an abuse of the process, potential sanctions could be applied although this is not intended to be a heavy-handed/sledgehammer type rule. Parties can agree it won’t apply and if so, must record their reasons. This is a straightforward way out.
Q – Is there potential for a Judge who has the trial bundle at a later stage to then raise questions over why a certain document was not disclosed earlier?
A – If the process to trial has been run conscientiously, but it is discovered that something has been missed, it should be able to be dealt with easily by everyone.
Q – Regarding costs budgeting, disclosure is stated to be dealt with later, can figures relating to other parts of the cost budget be amended if necessary? Will there be additional judicial resources to deal with this? Isn’t there a risk that this will increase the costs?
A – The benefit of the case management decisions help us to see what the costs budgets are going to be so sometimes a further stage is required. We are trying to get to a space where unnecessary hearings will be avoided however some revision may be necessary to make this clear i.e. to make these the exception and not the rule. In addition the parties are required to give an approximate cost of the disclosure they require at the earlier hearing. The Judge therefore already has some idea of the likely costs involved. Where the Court has no data at all, another hearing may be required to review the budget. Costs management is a high level exercise, and issues will often be able to be dealt with on paper.
Q – Models B, C, D and E retain the concept of a reasonable/proportionate search. A shift from D to C may be attractive and potentially fewer documents will be disclosed and included in the bundles however these must be extracted at some point and reviewed by individuals so a chunk of the costs will still be incurred.
A – Correct however the parties and the Court will face a large scale of the exercise where a lot of documents need to be reviewed – can this be reduced? If not, this cost will be incurred. However if Model C is ordered, e.g. instead of using Model D, the product may be for example 50,000, whereas D would be 200,000 and E would be 300,000. This will therefore save some costs down the line.
Q – Technology Assisted Review – is there scope for the use of this to be decided between the parties? In terms of de-duplication, could this be made mandatory?
A – A DRD will help parties and the Court focus on the role of technology:
1. DRD will be flexible enough to help parties articulate what they are going to do about documents that are not physical.
2. Technology is developing and we are at the initial stages. The more cost-effective and reliable technology can be as part of disclosure, it can be incorporated into the disclosure regime.
Q – Is there scope to clarify the process in relation to the Patents Court?
A – The Patents Court were offered the opportunity to opt out but they agreed to opt in to the regime. However, they have their own approach and will operate it in their own way. A bespoke approach is not encouraged but the Patents Court is a genuine exception to this. It is intended that there will be a framework that everyone can understand. Where Models A-E are in place plus any required adjustments and tools, we should expect to see this apart from in exceptional circumstances where a particular area of specialism and an appropriate alternative is put forward.
Q – Regarding disclosure of adverse documents, if parties opt for A or B, will there be potential problems because they are required to do a thorough search of their own documents?
A – The provision of adverse documents is required from a party’s knowledge. Adverse documents that are known about without a relevant search are required to be disclosed. Sometimes a search will be ordered however. Part 31 does not deal clearly with adverse documents and is silent but it is now visible as an important issue. The Courts consider that the balance is now about right. Adverse documents are to be expected as part of disclosure in this jurisdiction.
Q – Regarding the existing pressure in relation to resources/time allocation for case management, are we forcing too much into the process?
A – Pre-reading will be focussed if we are using the relevant tools e.g. DRD and engagement between the parties and the Judge will be focussed. This design does not have to be resource-intensive, however the degree of time taken is an investment for the Judges as well as the parties and their advisers. There will be a tough initial phase but we will make it work. Specific disclosure, including after the event, already takes a long time. Spending e.g. an additional 10 minutes at the end of the CMC will not add significantly to the time.