The New Disclosure Regime (Business and Property Court)

In this latest update, Priya Tromans discusses the New Disclosure Regime (Business and Property Court)

What does it mean for Case Management and Costs?

The new Disclosure Pilot Scheme, under Practice Direction 51U, is set to run for two years and replaces the rules currently set out in CPR Part 31.

However, any pre-existing disclosure order will not be disturbed unless the court sees fit to set aside or vary it.  Practice Direction 51U is intended to promote a change in the approach to disclosure in civil litigation and, following the ideas underpinning the overriding objective, should encourage a proportionate approach.  The Pilot Scheme will attempt to test out the new ideas and enable users to provide feedback over the two years.

Where is the scheme being piloted?

With some limited exceptions, the proposal is that the scheme will be piloted across the Business and Property Courts in the Rolls Building and in the centres of Bristol, Cardiff, Birmingham, Manchester, Leeds, Newcastle and Liverpool for a two- year period.

What’s changed for practitioners?

The Old Way

The Working Group, chaired by Lady Justice Gloster, identified the following key defects in the current disclosure regime:

  • It had been hoped that the standard disclosure test introduced in the CPR would reduce the volume of disclosure, and its cost. Unfortunately, this is not the case and the volume of data has vastly increased.
  • In practice, standard disclosure has remained the default order for most cases and legal professionals appear unlikely to utilise alternative orders under CPR 31.5 (7), many practitioners are not aware of the alternatives and so resort to the default option of ‘standard disclosure’.
  • Searches are often far wider than is necessary, producing vast quantities of data in fear of an accusation that documents were withheld. Again, in practice, only a small proportion of the data is in fact referred to at trial.
  • There is very little engagement between the parties and their advisers prior to the first CMC in relation to disclosure. In fact, most practitioners will know that, unless an application or offer to settle is contemplated, the CMC really is the first opportunity when the scope of disclosure is discussed. Even at that point, the discussion of disclosure is generally limited to the estimated cost of the exercise.
  • The existing rule was based on paper disclosure and is not fit for purpose when dealing with electronic data.

The New Way

  • The proposed scheme provides a starting point of “basic disclosure” .

Basic disclosure requires parties to disclose the key documents on which they rely and the key documents necessary to evidence the claim/defence. This basic disclosure is to happen at the outset when parties serve their statements of case.

However, a party does not have to carry out basic disclosure if it agrees this with its opponent, or the court so orders, or if it concludes that it would involve it or any other party providing more than 500 pages.

  • There are also “extended disclosure” Models A – E, which range from Model A (no disclosure) to Model E which extends to ‘train of enquiry’ documents. Model E “should be exceptional” according to the draft rules.

Before the first CMC

After close of statements of case, and before the Case Management Conference, the parties are required to discuss and jointly complete a joint Disclosure Review Document (“DRD”) (which would replace the existing Electronic Disclosure Questionnaire).

If the parties wish to opt for Models B – E, then they must indicate their intention to do so when serving their statements of case; they must liaise regarding a list of issues for disclosure; and which disclosure model would be appropriate for each issue.

If any of the disclosure models involve a search for documents, the parties will be required to exchange information about what documents they have and where they are stored, and their proposals for the search to be carried out. The issue will then be addressed at the case management conference, after which a disclosure order will be made. The following are also part of the new regime:

  • There are express sanctions for non-compliance. There is also a duty to disclose known adverse documents, irrespective of whether an order for disclosure is made.
  • There is no right to, nor a presumption in favour of, an order for Extended Disclosure; the parties must apply for and persuade the court that such an order is necessary.
  • New disclosure principles are introduced, including the need to preserve all documents that may be relevant to an issue in the proceedings and an obligation for parties to notify employees, former employees and third parties to prevent the destruction of documents.
  • The form of disclosure most practitioners are used to  –  where each party must carry out a reasonable search for documents supporting or adversely affecting any party’s case remains an option as Model D- but the phrase “standard disclosure” will not be used, emphasising that there is no default order for disclosure.
  • At the Case Management Conference, the court will decide whether Extended Disclosure is required and if so which Model of Extended Disclosure is to apply to each issue.
  • Parties need to estimate costs of their own and the other sides proposals for disclosure for the first CMC, but Form H Cost Budgets in relation to disclosure are to be completed only after an order for disclosure has been made.
  • In an appropriate case the court should be prepared to order that the question of which party bears the cost of disclosure is to be given separate consideration at a later stage;
  • Other more detailed provisions of CPR 31 will remain unchanged (e.g. pre-action disclosure, subsequent use of disclosed documents, orders for disclosure against persons not a party, and others).
  • The judge may provide for different models for different issues for Disclosure and provide different timelines for each.

Conclusion

If utilised to full effect, the new regime should make it much easier to limit disclosure to those areas where it is really justified. Parties that take the time to understand the rule and consider what documents they have and what they seek from the other side will be able to get a far more bespoke order for disclosure. There could be a real chance to avoid unnecessary disclosure and reduce the costs of the exercise, but it requires some early planning and genuine efforts to engage with the other side. Solicitors would be better placed for the new disclosure exercise by requesting all pertinent documents and asking their clients for the scope of disclosure at the outset of instruction.

Practice Direction 51U can be found here.

The Appendices contain documents and precedents required under Practice Direction 51U, as well as helpful guidance for completing them.