New disclosure rules adopted in the Business and Property Courts
These rules enable the parties to a dispute to take a much more flexible and proportionate approach to disclosure, allowing high court disputes to be more closely aligned to the approach taken in arbitration.
Although the new rules are described as a “pilot” (running for two years from 1 January 2019), it is likely that these rules, or at least a modified version of them, will in the future be adopted in all courts in England and Wales on a permanent basis.
Key features of the new rules
The rules on disclosure have been substantially re-written and only a few specific provisions from the old rules survive. The key features of the new rules are as follows.
- They are intended to produce a “culture change” by requiring the parties and their legal representatives to co-operate and engage with one another at an early stage. This is to help the court make an order for disclosure which is tailored to the requirements of each case.
- Parties to a potential dispute have clearly defined obligations to preserve documents at an early stage (once they know that they “may” become a party to proceedings). This extends to notifying employees and third parties of the need to preserve documents.
- Disclosure is split into two stages:
- Initial Disclosure which involves the parties giving disclosure of key documents early on in the proceedings (when the parties serve their statements of case).
- Extended Disclosure, whereby disclosure is made against identified “Issues for Disclosure”. The extent of the parties’ disclosure obligations is determined by reference to a menu of options (or Models) of disclosure. The procedure is discussed in more detail below.
- Whatever Disclosure Model is ordered, parties are expressly required to disclose “known adverse documents” (that is, documents of which they are aware and which are harmful to their case).
- A failure to engage constructively with the new rules is likely to result in court imposed sanctions. These could include adverse costs orders and/or the court refusing to grant a request for Extended Disclosure, or granting a different order from the one sought.
The rules make it clear that Extended Disclosure will not be ordered in every case. A party seeking Extended Disclosure will need to demonstrate that the order sought is appropriate, reasonable and proportionate to the issues in dispute.
The parties are required to agree a list of “Issues for Disclosure” (with the assistance of the court, if necessary). The aim of this list is to identify those issues in dispute, which the court will need to decide by reference to documentary evidence.
The court will then apply one of five Models (A to E) of Extended Disclosure to the Issues for Disclosure. These Models define the extent to which parties are required to search for and disclose documents and range from an obligation to disclose adverse documents only, without conducting any searches (Model A), through to an obligation to conduct wide-ranging searches and to disclose “train of inquiry” documents (Model E). Different Models can be applied to different Issues for Disclosure and asymmetrical disclosure obligations can be imposed on the parties.
The new Model D closely resembles “standard disclosure”, which was the default position under the old rules. Broadly, it requires parties to conduct a proportionate search for, and to disclose, documents which help or harm any party’s case. However this type of disclosure is likely to be less common than before. All references to this approach being “standard” have deliberately been dropped and the new rules expressly say that a party proposing Model D should be ready to explain why Model C is not sufficient.
Model C involves the court ordering disclosure of particular documents or narrow classes of documents by reference to requests made by the parties. This approach is similar to the one often adopted in arbitration (albeit with an added obligation always to disclose known adverse documents).
Once Extended Disclosure has been ordered, the parties are required to discuss and seek to agree the scope of the searches required to identify disclosable documents. If this is not possible, disputes can be resolved by the court at a “Disclosure Guidance Hearing”. The new rules place a greater emphasis on the use of technology and the parties are expressly required to consider the use of (amongst other things) technology assisted review software and techniques.
Disclosure remains an important feature of litigation in England and Wales. In particular, the obligation on parties to disclose documents (including ones which may be harmful to their own case) is one of the reasons why the English courts are attractive to many litigants (particularly claimants).
However, the old rules were not designed to cater for the modern commercial environment, in which large (and often vast) amounts of electronic documents are created. The result was that, under the old rules, disclosure had become disproportionately time-consuming, expensive and complex.
The new rules seek to resolve this problem by requiring the parties to adopt a more targeted approach to disclosure. This is likely in many cases to result in a move away from open-ended orders for “standard disclosure” (or Model D as it is now known) and towards a request-based process similar to the one often adopted in arbitration.